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The Losses memorandum template records the company's revenue losses by type: brought forward, arising in the period, utilised, surrendered and carried forward. It is also where you decide how losses generated in the current period are relieved. Relief for losses brought forward from earlier periods is set in the separate Losses carried forward relieved template, and the amounts are shown here.

Table of contents 

When should I use this template?

Use it to keep the memorandum of losses up to date and to decide how current-period losses are relieved: set against current-period total profits, carried back, surrendered as group relief, surrendered for an R&D tax credit (trading losses only), or carried forward.

Before you start

  • Complete the income templates (Trading income, Property income, Loan relationships, Management expenses and Miscellaneous income) so the current-period results are known, as this template reads them.
  • If the company is a member of a group, tick "Is the company a member of a group or consortium for group relief purposes?" in Return information so the group relief rows appear.
  • The Management expenses column only appears where UK investment business is selected as a business type in Return information.

Pre-2017 vs post-2017 losses

Losses arising before 1 April 2017 are subject to the older, more restrictive rules (they are streamed against the same type of income), whereas losses from 1 April 2017 can generally be relieved more flexibly against total profits.

Tick "The company has losses carried forward from before 1 April 2017 to be relieved." to split the brought-forward memo into Pre 1 April 2017 and Post 31 March 2017 sections. You can then enter pre-2017 brought-forward trading losses, property losses, non-trade loan relationship deficits and management expenses separately from the post-2017 losses, so each is relieved under the correct rules.

Working through the losses

The template tracks five types of loss: trading losses, property losses, non-trade loan relationship deficits, management expenses and miscellaneous losses. Capital losses are not tracked here; they are dealt with in the chargeable gains templates and flow to Taxable income from there.

Losses carried forward memo (brought-forward losses)

  • Losses brought forward: enter the opening balance for each loss type (rolled forward from last year where available).
  • Utilised in period: comes from the Losses carried forward relieved template. Miscellaneous losses are the exception: you enter their utilisation here, and it defaults to the lower of the brought-forward miscellaneous losses and the current-period miscellaneous income.
  • Surrendered as group relief (group members only): post-2017 brought-forward losses surrendered to other group companies.
  • Current period losses carried forward, Other adjustment and Losses carried forward, with a total of all losses carried forward.

Current period loss memo (losses arising this period)

  • Loss arising in the period: read from the income templates.
  • Utilised in period: defaults to the amount that can be set against current-period total profits; you can overwrite it.
  • Surrendered as group relief (group members only), with a Maximum available for surrender as group relief line below the table.
  • Carried back utilised in prior 12 months (trading losses and non-trade loan relationship deficits).
  • Carried back utilised in earlier periods by temporary extension (trading losses).
  • Carried back utilised in prior 36 months on cessation (trading losses).
  • Surrendered for R&D SME tax credit or, for accounting periods starting on or after 1 April 2024, Surrendered for Enhanced R&D intensive support (ERIS) tax credit (trading losses), shown with the cash credit rate from Rates and allowances. For periods starting on or after 1 April 2024, this row only appears when the Research and development claim template is starred and set to ERIS.
  • Other adjustment.
  • Whatever is left is shown as Current period losses carried forward.

Amounts that reduce a loss (utilisation, surrenders, carry-backs) must be entered as negatives; a positive figure is flagged with "This amount has to be negative." For a long period of account, a separate memo is shown for each accounting period.

In the edit view every column is shown so you can enter figures. In the preview and export, only the loss types and rows that contain amounts are shown.

How does group relief work with the Group relief template?

Surrendered amounts can be entered in both templates, but the Losses memorandum figure is the one used in the tax computation. The Group relief template is where you enter the claimant company details for the CT600C, along with the amount surrendered to each one.

The Group relief template compares its total with the surrender in the Losses memorandum. If you enter a surrender only in the Group relief template, its total shows a warning ("Total per Losses memorandum", "Difference") until the same amount is entered as Surrendered as group relief in the Losses memorandum. Surrenders of current-period losses are matched to Part 2 of the Group relief template, and surrenders of brought-forward losses to Part 4.

For the full group relief process, including the claimant side and the Return information authorisation details, see How do I use the group relief functionality? (UK market).

What flows through to the rest of Corporation Tax?

  • Loss relief, both current-period and brought forward, feeds the Taxable income computation, reducing taxable total profits.
  • Group relief surrenders are compared against the Group relief template, as described above.
  • The template provides the CT600 figures for claims affecting an earlier period (box 45), trading losses arising in the period (box 780) and the R&D tax credit payable (CT600L box L170), as well as the losses tagging in the iXBRL tax computation.
  • The brought-forward balances are used by the Losses carried forward relieved template.

What rolls forward next year?

The losses carried forward for each loss type, pre-2017 and post-2017, roll forward to become next year's brought-forward figures. Current-period entries such as utilisation overrides, group relief surrenders, carry-backs, R&D surrenders and other adjustments are cleared.

Where the data comes from

  • Current-period losses are taken from the income templates: Trading income, Property income, Loan relationships, Management expenses and Miscellaneous income.
  • Chargeable gains (net of capital losses) are read from the Connected and Unconnected chargeable gains summary templates, only to work out the total profits available for relief. They are not recorded as losses here.
  • Utilisation of brought-forward losses comes from the Losses carried forward relieved template (except miscellaneous losses).
  • Group relief surrenders are entered here and checked against the Group relief template. Group membership and business type come from Return information.
  • R&D surrenders are entered here. Whether the ERIS row shows comes from the Research and development claim template, and the cash credit rate from Rates and allowances.
  • Brought-forward balances are entered here or rolled forward, split between pre-2017 and post-2017 losses.

Frequently asked questions

What is the pre-2017 checkbox for?

It splits the brought-forward memo so that losses carried forward from before 1 April 2017 are relieved under the older streamed rules rather than the flexible post-2017 rules.

What is the difference between this and Losses carried forward relieved?

This template records the memorandum and decides how losses arising in the current period are relieved. The Losses carried forward relieved template sets the relief for losses brought forward from earlier periods (apart from miscellaneous losses), and this template shows the result.

Which losses does it track?

Trading losses, property losses, non-trade loan relationship deficits, management expenses and miscellaneous losses. It does not track capital losses.

Why can't I see the group relief rows?

They only appear when the company is marked as a member of a group or consortium in the Return information template.

Why is there a warning on the Group relief template?

The total surrendered in the Group relief template doesn't match the amount surrendered as group relief in the Losses memorandum. Enter the same amount in the Losses memorandum, which is the figure used in the tax computation.

Why can't I see the R&D surrender row?

For accounting periods starting on or after 1 April 2024, it only appears when the Research and development claim template is starred and set to ERIS. If there's no R&D claim this period but you need to deal with a historical one, tick "Tick this box if no R&D claim this period, but historical R&D claim to address" in Return information to show the row. For help choosing the right R&D template, see UK Corporation Tax R&D claim templates: selection and data entry.

Enter anything that reduces a loss — utilisation, group relief surrenders, carry-backs and R&D surrenders — as a negative figure. A positive amount is rejected with "This amount has to be negative."