Did you know that businesses can claim relief on their corporation tax for certain losses? This can be a great way to reduce your tax bill and keep more money in your pocket.
In this blog post, we will discuss how loss relief works and who is entitled to it.
What is Loss Relief?
Loss relief is a tax break that businesses can claim for certain types of losses. This could include losses from the sale of assets, business interruption, or even theft.
If you have suffered a loss in any of these areas, you may be able to get some money back from the government in the form of a tax refund.
Trade losses may be used in a number of ways against:
- Profit from the same trade in the current or previous year
- Profit from a different trade in the same year
- Capital Gains Tax
The types of claim you can make will depend on your circumstances. You may be able to offset your losses against other income, carry them forward to offset against future profits, or set them against capital gains.
Who is Entitled to Loss Relief?
To be eligible for loss relief, you must be a business owner or self-employed individual. You will also need to have suffered a financial loss in one of the qualifying categories.
If you meet these criteria, you may be able to get some money back from the government.
How Loss Relief Works
Simply stated, to claim a corporate tax reduction, you must offset your loss against any other profits that your firm earns during the same tax year.
When it comes to calculating trading losses, you must make all necessary tax adjustments to the amount of profit (or loss) generated by your business.
If, unfortunately, you suffer a trading loss and cannot access relief in the same year, you can instead choose to offset it against previous accounting periods. Alternatively, you may carry it forward and use the loss to offset future income.
Keep in mind that there is a difference between how capital assets losses and trading losses are handled. This means that you cannot offset these losses against your income. Instead, any capital losses are simply offset automatically, making calculations and taxation much easier.
How to Claim Loss Relief
If you think you are entitled to loss relief, the first step is to speak with an accountant or tax specialist. They will be able to help you determine if you qualify for the tax break and, if so, how much money you could be eligible to receive.
Once you have all of the necessary information, you can begin the process of filing your claim.
Remember, loss relief can be a great way to reduce your tax bill and get some money back from the government. If you think you may be eligible, be sure to speak with us and get started on your claim today!
To know more, get in touch with us today.
