How do I: Deal with Trading Losses on a single trade company

this article explains how to deal with Trading Losses in Sage Corporation Tax.

PROFIT AND LOSS SCREEN

How do I create a loss in the period?

Profit & Loss transactions will result in your (Loss) on Ordinary Activities Before Taxation, which has to be assigned to the relevant Trade named underneath the Profit Before Tax.

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LOSSES THIS PERIOD SCREEN

How do I offset trading losses against other income during the current period?

• Assuming you have entered your other income on the Profit & Loss
• Access the relevant Trade > Losses > On "Losses this period" > enter the amount to be relieved in 'Relieved in this period' writeable field.
• This will populate box 30 on the CT600.

• To view ‘Losses relieved in the period’ click on the Claims & Reliefs section of the navigator, then click on Losses to preview the Losses summary.

How do you carry a trading loss back to prior years?

Carry back 1 year:

• Access the Trade > Losses > On “Losses this period” > enter the “Relieved in previous period”

Carry back terminal losses (cessation) for two and three years:

• Access the Trade > Losses > On “Losses this period” > enter the “Relieved in earlier periods”

To view Losses carried back, click on ‘Reporting’ at the top of the screen, select Report Pack. Within the ‘Computation and supporting reports’ section, choose ‘UK trade losses’

To tick the “Repayment claim made for earlier period” box on your CT600, select ‘Return information’ within ‘Tax return disclosure information’ in the navigator. Tick the box marked ‘A repayment is due for an earlier period”

CAUTION: We recommend you notify HRMC in writing of your wish to reclaim losses for earlier periods by attaching a PDF document at step three of the online filing wizard.

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LOSSES B/F Screen

Losses brought forward :

Losses brought forward can be entered by opening your Trade, select the Losses tab. On the ‘Losses b/f’ screen enter you figure in the box titled “Loss b/f”

Less: Losses Foregone/amounts no longer available:

• “The amount of tax losses that have been forgone by the entity, i.e. tax losses that will not be deducted in any later income year”
• Enter ‘Losses Foregone’ in the writeable field.

NOTE: You must have a Loss carried forward for this to be offset against

Loss transferred in and available for relief:

To transfer in a loss as per CTA 2010 s944, enter the figure in the writeable field. For more information on Losses transferred in please refer to CTA 2010

Relieved in this period:

Relieved against interest and dividends treated as trade profit:

Input a figure in the writeable field.

NOTE: This will be displayed on the Losses summary as ‘Interest and dividends treated as trade profit - CTA 2010 s46(2)’

Relieved against eligible miscellaneous income and gains:

This Period loss c/f:

Surplus qualifying charitable donations:

Input a figure in the writeable field.

Less qualifying charitable donations surrendered as group relief:

Input a figure in the writeable field.

Less qualifying charitable donations:

Input a figure in the writeable field.

Losses transferred out:

‘Losses transferred out’ can be entered by opening the Trade, Losses tab. On the ‘Losses b/f’ tab enter your figure on the line titled ‘Losses transferred out’

Losses extinguished on cessation:

Any losses that cannot be utilised on cessation can be entered by opening the Trade, Losses screen. On the ‘Losses b/f’ enter the figure in the box “Extinguished on cessation”

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LOSSES B/B SCREEN

How do I enter Losses Brought Back to this period?

Access the Trade > Losses > On “Losses b/b”. Enter your ‘Losses brought back’ with the date of relevant period.

This will appear in your ‘Tax computation’ which can be accessed from the navigator.

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