A company has a trading loss of £50,000 in the year ended 31 March 2027 and had taxable profits of £80,000 in the previous 12 months. It has no other income. Which relief options are available for the loss?
Answer and explanation
Correct answer: A. Set it against total profits of the same period, carry it back 12 months, or carry it forward
- Step 1: A company can claim relief for a trading loss against total profits of the same accounting period.
- Step 2: Any unrelieved amount can be carried back 12 months, or carried forward against future profits.
Answer
Set it against total profits of the same period, carry it back 12 months, or carry it forward.
Why not the others: Carry-back and current-period relief are available too. The loss is first set against current-period profits, and the general carry-back is 12 months, not three years. Trading losses are relievable.
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