CIOT comments on carried forward corporation tax losses - compliance obligations

Released 8/9 October 2018

The Chartered Institute of Taxation (CIOT) has published comments sent to HMRC about carried forward corporation tax losses and associated compliance obligations.

Finance (No. 2) Act 2017 introduced changes to the rules relating to corporation tax losses. The CIOT has written to HMRC regarding the compliance obligations arising from those changes following concern expressed by its members. One of the key changes made as part of the reform of the loss relief rules is that the amount of annual profits that can be relieved by carried-forward losses is limited to 50%, subject to an allowance of £5 million per group. The CIOT is concerned that not enough has been done to ensure that smaller companies and groups of companies, which will have concluded (quite correctly) that the restriction does not apply to them because their profits are well below the £5m threshold, are aware that there are new compliance obligations which nonetheless must be met. The CIOT comments reiterate concerns raised by the Association of Taxation Technicians (ATT) in its letter to HMRC and the CIOT also requests HMRC’s guidance, the company tax losses toolkit and CT600 guidance be updated to highlight the compliance requirements more clearly.

View the submission Carried forward corporation tax losses: compliance obligations - CIOT comments.

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