Budget 2009 – Loss relief
The Chancellor has bowed to pressure to correct anomalies in the extended loss relief provisions he announced last year. This further extension to loss reliefs already available will enable both incorporated and unincorporated businesses to carry back current losses, that were previously restricted to set off against the preceding year’s profits only, to the previous 3 years profits.
The following bullet points summarise the main points:
- The relief is now available for two years. For limited companies, trading losses in an accounting period ending between 24 November 2008 to 23 November 2010. For unincorporated business losses agreed for a trading period that forms the basis period for 2008-09 and 2009-10.
- HMRC will make repayments occasioned by claims for the new relief on or after Budget Day 2009.
- The amount of the loss that can be carried back one year is still unlimited. Any carry back to the earlier two years will be limited to £50,000. The £50,000 limit is an annual limit.
- Losses will be applied to the latest of the three years first.
- As this is an extension to existing loss relief legislation, the current reliefs are still available.