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Extended Loss Carry Back

The events of the last 18 months have impacted all businesses differently. In this blog we look at what happens to those who have made losses in the financial year. New rules were introduced to make the treatment of losses more flexible than the current carry back of 1 year.


The Extended Loss Carry Back measure announced in the Spring Budget 2021 enables both corporate and unincorporated businesses to make claims to carry back losses for a further two years than current rules allow.


In respect of unincorporated businesses, any reference to a trade includes a reference to a profession or vocation, and any reference to a person carrying on a trade includes those doing so in a partnership.


For accounting periods ending between 1 April 2020 and 31 March 2022, the rules allow trading losses to be carried back three years, with losses required to be set against profits of most recent years first before carry back to earlier years.


There is no change to the current one-year unlimited carry back of trade losses, but the earlier 2 years of the extended period are capped.
This is a cap of £2,000,000 of losses for all relevant accounting periods ending in the period 1 April 2020 to 31 March 2021 (financial year 2020).

A separate cap of £2,000,000 applies for all relevant accounting periods ending in the period 1 April 2021 to 31 March 2022 (financial year 2021).



MATCH is working hard to keep on top of all the latest news and government support so, as always, feel free to get in touch if you have any queries and we’ll be happy to help.


MATCH Accounting Limited