A trading loss that is not used in the year it arises, and is not carried back, is carried forward to set against later profits. The return has no box for the balance being carried: it shows the loss when it arises (box 780) and again only when some of it is used (box 160 or box 285). Tax Optimiser keeps the balance for you on the Losses section of the computation. This page follows a loss from the year it is made to the year it is used.
For the other things you can do with a loss, see Carrying a trading loss back and Group relief. For a tour of the whole Losses section, see Losses in the Corporation Tax series.
Two kinds of carried-forward loss
The rules changed on 1 April 2017, and a company can hold losses of both kinds.
| Losses made before 1 April 2017 | Losses made from 1 April 2017 | |
|---|---|---|
| Set against | Profits of the same trade only | Total profits: trading profits, interest, rents, gains |
| How | Automatically, as much as the trading profit allows, unless the company claims to use less | By a claim in the return |
| CT600 box | 160 | 285 |
| Field in Tax Optimiser | Trading Loss B/F (pre 1 April 2017) | Trading Loss B/F Amount |
In both cases the trade must still be carried on. If the trade has stopped, see When the trade stops.
The year the loss is made
Example Recovery Ltd makes a trading loss of £40,000 in the year to 31 March 2025. It also has £6,000 of old losses from before April 2017 that it has never been able to use.
You do not enter the £40,000. Tax Optimiser works it out from the trial balance and the tax adjustments, and it is the tax-adjusted result that counts, not the loss in the accounts: after adding back depreciation and taking off capital allowances, an accounts loss can be a taxable profit, and the other way round. The Loss movement table at the top of the Losses section shows both figures.
With no other income to set it against and no claim to carry it back, the whole loss is carried forward. The return reports it in box 780 and nothing else.
Bringing the losses into the next year
Losses do not move from one period to the next by themselves. Each period holds its own brought-forward figures, so that a period can be prepared before the one before it is final.
- Open the next period and choose Corporation Tax, then Losses.
- Click Pull losses from prior period. Tax Optimiser reads what the previous period’s computation carries forward and shows it beside the figures held here. Differences are highlighted.
- Click Use prior period figures, then Save.
The figures land in the two brought-forward fields, where you can also type them yourself.
First period in Tax Optimiser? There is no earlier computation to pull from, so type the losses in from the previous return’s computation. They are never read from the balance sheet: a deficit on reserves is an accounting figure and is rarely the same as the tax loss. If there is tax to pay, the reserves brought forward are in deficit and no losses have been entered, the Losses section and the submission wizard warn you.
The submission wizard also warns when the figures brought forward here differ from what the previous period carries forward by £1 or more.
How the losses are used
In the year to 31 March 2026 the company makes a trading profit of £30,000 and earns £2,000 of bank interest.
| Box | £ | |
|---|---|---|
| 155 | Trading profits | 30,000 |
| 160 | Pre-2017 losses, against the trade only | (6,000) |
| 165 | Net trading profits | 24,000 |
| 170 | Bank interest | 2,000 |
| 235 | Total profits | 26,000 |
| 285 | Post-2017 losses, against total profits | (26,000) |
| 315 | Profits chargeable to Corporation Tax | nil |
The old loss goes first and can only reach the trading profit. The newer loss then covers everything that is left, including the interest, which the old loss could not touch. Of the £40,000, £26,000 is used and £14,000 is carried forward again.
Tax Optimiser always uses as much loss as the profits allow. Only the amounts used appear on the return.
The CT600 boxes
Choose CT600 Boxes in the Corporation Tax screen to see the return’s figures. All of these are calculated from the Losses section.
Box 160: Trading losses brought forward set against trading profits
Pre-April-2017 losses used this period. It can never be more than the trading profit in box 155, and it stays empty unless Trading Loss B/F (pre 1 April 2017) holds a figure. Entering an old loss in the other field sends it to box 285 instead, which gives it relief against income it is not entitled to.
Box 275: Trading losses of this or a later accounting period
Not a carried-forward loss. This is a loss of the same period set against that period’s other income, or a loss carried back from a later period (when box 280 is also marked). It is used before box 285.
Box 285: Trading losses carried forward and claimed against total profits
Post-April-2017 losses used this period. Putting a figure here is the claim; there is no separate form. It is limited to the profits left after the reliefs above it on the return, and for larger companies by the deductions allowance.
Box 780: Trading losses arising
The trading loss made in the period, before any of it is used. It appears in the loss year only. Box 785 beside it is the most that could be surrendered as group relief. A trade carried on wholly outside the UK uses box 790 instead.
Box 790: Losses of trades carried on wholly outside the UK
The trading loss made in the period when the whole trade is carried on outside the UK. It takes the place of box 780, and is filled only when Trade carried on wholly outside the UK is ticked on the Losses section. See A trade carried on wholly outside the UK.
A trade carried on wholly outside the UK
A UK company whose whole trade is carried on abroad still pays Corporation Tax on its profits, unless it has elected to exempt a foreign permanent establishment. Its losses are treated differently from a UK trade’s. A loss of such a trade:
- is reported in box 790, not box 780;
- cannot be set against other income or gains of the same period, and cannot be carried back;
- cannot be surrendered as group relief;
- is carried forward and set against later profits of the same trade only, in box 160. This is the old same-trade rule, whatever the date of the loss.
To tell Tax Optimiser, open Corporation Tax, then Losses, tick Trade carried on wholly outside the UK at the top and Save. Tick it in every period of the trade: the setting is held for each period and is not copied forward.
Example Abroad Trading Ltd carries on its whole trade overseas. In the year to 31 March 2025 it makes a trading loss of £40,000 and earns £2,000 of bank interest. A UK trade would set £2,000 of the loss against the interest and pay nothing. Here the loss cannot reach the interest, so the company pays tax on £2,000 and carries the whole £40,000 forward.
On the return, box 790 holds the loss and boxes 780 and 275 stay empty.
In the next period, tick the box again and click Pull losses from prior period. The loss arrives in Trading Loss B/F (same trade only), the field that feeds box 160. In the year to 31 March 2026 the company makes a trading profit of £30,000 and £2,000 of interest: £30,000 of the loss is used against the trade, the interest is taxed again, and £10,000 is carried forward.
When a period of account is filed as two returns, each return reports its own loss in box 790, and the first return’s loss passes to the second automatically, where it is set against that return’s trading profit in box 160. There is nothing to enter in Trading Loss Brought Forward (from Period 1).
Losses from before you ticked the box. If earlier periods of this trade were prepared without the setting, their losses are sitting in Trading Loss B/F Amount and would be claimed against total profits in box 285. Move them to Trading Loss B/F (same trade only).
With the box ticked, Tax Optimiser refuses a carry-back or a group relief surrender of the trading loss. It also does not support surrendering the loss for an R&D or creative industries tax credit.
The £5 million deductions allowance
Carried-forward losses can relieve profits in full up to the deductions allowance, which is £5 million for a 12-month period and is shared across a group. Above it, only half of the remaining profits can be relieved. Most companies never reach it.
When brought-forward losses are in use, the Losses section shows Group deductions allowance share. Leave it blank for a company that is not in a group; in a group, enter the share allocated to this company. Tax Optimiser applies the restriction to the post-2017 trading losses in box 285 and keeps the restricted amount carried forward. It does not restrict other brought-forward reliefs, such as property losses or non-trading deficits, and warns you to check the total when they are in use together.
Periods with two returns
When a period of account is longer than 12 months and is filed as two returns, a loss in the first return can be used in the second. The Losses section shows Loss Available to Bring Forward from Period 1; enter the amount to claim in Trading Loss Brought Forward (from Period 1), and it goes in box 285 of the second return, limited to that return’s profits. The brought-forward fields at the top are for losses from before the whole period. See Accounting periods longer than 12 months.
When the trade stops
A trading loss can only be carried forward while the company carries on the trade. When the trade ceases, the Loss movement table shows whatever is left as Unrelieved on cessation of trade. That balance is not automatically lost: the company can claim terminal relief for carried-forward losses.
The claim sets the unused loss against the profits of the final period and of earlier periods so far as they fall within the three years ending with the end of the final period, latest first. A post-2017 loss is set against total profits, and a loss limited to the same trade (a pre-2017 loss, for example) against the profits of that trade. Nothing can be set against the period in which the loss was made or any earlier period, or against a period that began before 1 April 2017. The claim must be made within two years of the end of the final period. HMRC’s guidance on terminal losses explains how to claim.
A loss of the final 12 months can also be carried back three years: see Carrying a trading loss back.
What Tax Optimiser does not do
- Partial claims. A company may claim less than the full post-2017 loss, for example to keep relief for a charitable donation, which is given after losses and cannot itself be carried forward. Tax Optimiser always claims the maximum in box 285.
- Losses that cannot be carried forward against total profits. A trade that has become small or negligible, or is not run commercially, keeps the old same-trade rule even for losses after April 2017. Enter those in the pre-2017 field so they are restricted to trading profits.
- Terminal relief for carried-forward losses. Tax Optimiser shows the balance left when the trade ceases as Unrelieved on cessation of trade. It does not work out the claim described under When the trade stops, so work it out yourself and make the claim to HMRC.
HMRC’s overview is at Corporation Tax: calculating and claiming a loss.
Common questions
Why is box 160 empty when the company has losses brought forward?
Box 160 is only for losses made before 1 April 2017. Later losses are claimed in box 285. Box 160 also stays empty in a year with no trading profit to set the loss against.
Where on the CT600 do I put the balance of losses carried forward?
Nowhere. The return has no box for it. The balance is shown in the computation that goes with the return, and on the Losses section in Tax Optimiser.
How long can a trading loss be carried forward?
Indefinitely, as long as the company carries on the same trade.
The accounts show a loss but Tax Optimiser shows no loss for tax. Why?
The tax result is the accounts result after adjustments. Depreciation and disallowable costs are added back and capital allowances taken off, and that can turn an accounts loss into a taxable profit. The Loss movement table shows both figures.
Can I choose not to use a brought-forward loss this year?
For post-2017 losses the law lets a company claim less than the full amount, but Tax Optimiser always claims the maximum. Pre-2017 losses are used automatically, but the law gives a choice here too: a company may claim that the trading profits of a period are not to be reduced by the loss, or not by more than an amount it specifies. That claim must be made within two years of the end of the period. Tax Optimiser always uses the maximum for these losses as well.
The brought-forward figure does not match last year. Which is right?
Use Pull losses from prior period to compare them. Keep your own figure only if the earlier return was amended or the loss was changed outside Tax Optimiser, for example by an HMRC enquiry.
How do I report a loss in box 790 instead of box 780?
On the Losses section, tick Trade carried on wholly outside the UK and save. The loss moves from box 780 to box 790 and is carried forward against the same trade only. For a period filed as two returns, each return shows its own loss in box 790.
Do brought-forward losses reduce the profits used for marginal relief?
Yes. The limits are tested against profits after losses, so a loss can take a company below the upper limit or into the small profits rate. See Marginal relief and associated companies.
