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The Losses carried forward relieved template determines how losses brought forward from earlier periods are used against the profits of the current period. It works alongside the Losses memorandum, which records the loss balances; this template applies the relief and handles the deductions allowance.

Table of contents 

When should I use this template?

Use it where the company has losses brought forward and profits in the current period against which those losses can be relieved.

Before you start

Complete the Losses memorandum (for the brought-forward balances) and the income templates (for the current-period profits), as this template reads both. Its profit figures default from the computation but can be overridden.

Background: carried-forward loss relief and the deductions allowance

Losses arising from 1 April 2017 can generally be relieved against a company's total profits, whereas pre-2017 losses are streamed against the same type of income. Larger companies are subject to the deductions allowance — broadly a £5 million annual allowance, with only 50% of profits above it available to be relieved by carried-forward losses.

What you enter

  • In-year reliefs (profits available) — the trade profits, non-trade income, chargeable gains and other non-trade profits available for relief. These default from the computation; override them if needed.
  • Deductions allowance — allocate the company's deductions allowance across the profit streams (trade profits, non-trade income, chargeable gains, non-trade profits). This sets the cap on how much carried-forward loss relief can be claimed against each stream.
  • Streamed (pre-2017) losses — the amounts of pre-2017 trading losses, non-trading loan relationship deficits, property losses and management expenses set against the income they are streamed to.
  • Deductions against (post-2017 losses) — the amounts of each carried-forward loss type relieved against the available profits.

The template checks the amounts against the losses available, the profits and the deductions allowance, and shows the relief given.

What flows through to the rest of Corporation Tax?

The relief given reduces taxable total profits in the Taxable income computation, and reduces the carried-forward loss balances in the Losses memorandum.

Where the data comes from

  • The profits available (the in-year reliefs figures — trade profits, non-trade income, chargeable gains, non-trade profits) default from the current-period computation, and can be overridden.
  • The loss balances brought forward come from the Losses memorandum.
  • The relief given here reduces Taxable income and updates the carried-forward balances in the Losses memorandum.

Frequently asked questions

How is this different from the Losses memorandum?

The memorandum records the balances and the use of current-period losses. This template applies relief for losses brought forward from earlier periods.

What is the deductions allowance and where do I set it?

It is the restriction on carried-forward loss relief for larger companies (broadly £5m plus 50% of profits above). Allocate it across the profit streams in the deductions allowance section here.

Why are pre-2017 losses handled separately?

Pre-2017 losses are streamed against the same type of income, so they are relieved through the "streamed losses" inputs rather than against total profits.