Differences in the loss amounts of Company Tax Returns

HMRC have recently written to companies who have losses brought forward on their corporation tax returns. This affects all years since the loss rules changed on 1 April 2017.

They have identified that some software providers were mistakenly including figures in the wrong boxes on the Company Tax Returns (CT600). Essentially in the boxes where the losses for the year should have been disclosed, the brought forward losses were being included as well, so the losses were overstated.

HMRC accept that this is merely a disclosure error on the Return and does not mean any tax was under or overpaid. The tax computations which are submitted with the Returns were correctly disclosing the losses and there are no known errors on the tax computations. HMRC’s letter to affected companies is therefore just telling clients that they will take the loss figures from the tax computations rather than the Company Tax Return. Affected companies do not need to take any action.

If you receive such a letter and are concerned please do contact us and we can review the position.

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