What is it?
The loss reforms, first announced in the 2021 Budget, increase the flexibility that businesses have over the use of tax losses against profits. These new rules will apply to companies, sole traders and partnership and allow losses incurred for accounting periods between 1 April 2020 and 31 March 2022 (tax years 2020/21 and 2021/22 for unincorporated businesses) to be carried back 3 years to obtain tax refunds (under previous rules, losses could only be carried back 1 year).
Who is it for?
Companies, unincorporated associations, sole traders and partnerships.
How does it work?
In 2020/21 and 2021/22, eligible businesses can carry tax losses back three years to obtain a tax refund. There is a £2m cap on the losses that can be carried back to certain previous years.
What should I do next?
Critchleys Clients: If you have specific questions, please contact your Critchleys Accountant directly.
Non-Critchleys Clients: if you have any questions, please get in touch.
First Published 5 March 2021
Last Updated 5 March 2021
5 March 2021
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