Businesses that were previously profitable but are now potentially loss-making can apply for what is known as a ‘provisional loss carry-back claim’ from HMRC.
What is a provisional loss carry-back claim?
A provisional loss carry-back claim is a little known submission by which a business that is set to make a loss can seek relief against profits made in a previous profit-making period and reclaim the corporation tax previously paid to HMRC.
The provisional loss carry-back claim will give access to a repayment equal to 19% of the anticipated loss so an example if a company made a taxable profit of over £100,000 in the prior period but is set to make a loss of £100,000 this period, the repayment available would be £19,000.
Under normal circumstances, a carry-back claim is made when the company accounts and corporation tax return for the loss-making period are submitted. However, the claim is designed to accelerate cash relief and secure repayment of corporation tax at times of extreme business turbulence, such as those often experienced as a result of a financial crash or the current COVID-19 crisis.
How can TC Group help?
Ordinarily, we would need to prepare and finalise your accounts to quantify any losses before we could claim on your behalf. However, given the current situation, it is possible with appropriate supporting evidence, to agree on a provisional loss carry-back claim with HMRC, potentially enabling you to claim anticipated losses immediately rather than having to wait.
The team at TC have worked on many successful claims of this type. If you would like to learn more about how TC can aid your business cash flow via an application for a provisional loss carry-back claim contact your TC Partner on 0330 088 7111.