BrightTax supports the entry of both current year trading losses and losses brought forward from prior years within the Corporation Tax return. This article explains how to enter each type and how they feed into the CT computation.

Losses brought forward from prior accounting periods are entered in the Losses Memorandum section at the bottom of the CT Computation (Adjustments to Profit) page.

1. Open the CT return and navigate to the CT Computation page via the Table of Contents.
2. Switch to Edit mode using the bottom-left toggle.
3. Scroll to the Losses Memorandum section at the bottom of the page.
4. Enter the total trading losses brought forward from prior years in the relevant field.
5. BrightTax will automatically calculate how much of the loss is used against the current year profit and how much carries forward.
6. Click Save.

Where a company makes a trading loss in the current year and has profits from other sources — for example, property income or chargeable gains — the loss can be offset against those profits in the same period.

1. Navigate to the CT Computation page.
2. In the loss relief section, enter the amount of the current year loss to be offset against other profits.
3. BrightTax will apply the offset and recalculate the CT liability.
4. Re-run Check and Calculate to update the computation.

Where a company elects to carry back a trading loss to offset against profits of a prior period, this is reflected in the CT600 form. Enter the carry-back amount in the relevant CT600 box and ensure the prior period CT return is also amended to reflect the repayment due.

The losses brought forward figure is not reducing the taxable profit

• Ensure you have entered the figure in the Losses Memorandum section, not just noted it elsewhere in the computation.
• Check that the company has sufficient taxable profits against which the loss can be offset.
• Re-run Check and Calculate after entering the loss figure.

Q: How do I find the losses brought forward figure?

A: The losses brought forward figure should come from the prior year CT computation. Check the closing balance in the Losses Memorandum section of the most recent submitted CT return.

Q: Can I carry forward a loss indefinitely?

A: Under current HMRC rules, most trading losses arising from April 2017 onwards can be carried forward indefinitely. Pre-April 2017 losses can only be carried forward against the same trade. Always verify the loss rules applicable to the specific client's circumstances.

Q: Does BrightTax automatically carry forward unused losses to the next period?

A: No. Losses carried forward must be manually entered in the Losses Memorandum section of each subsequent CT return.