As part of the UK Government’s efforts to help businesses recover from the effects of Covid-19, companies can now carry back trading losses for 3 years and claim refunds of taxes already paid.
The UK already allows trading losses to be carried back one year without restriction. Now, for companies with an accounting period ending between 1 April 2020 and 31 March 2022, they will have an extension and be able to claim refunds over the earlier three years. The current one-year unlimited carry back of trade losses remains unchanged.
As you would expect, there is a restrictions on this very generous additional benefit. It is that the claim is limited to GBP 2 million which can be claimed against each of the earlier two years.