CTM04150 - Corporation Tax: trading losses: general: relief for losses carried forward: finality of figures

CTM95440 confirms that losses and other amounts included in a return become final on expiry of the time limits for amendment of the return. These amounts must then be used for the purposes of any subsequent return that are affected by the use of the carried forward amounts.

Where a loss has been stated in a return and has become final, the fact that the loss is shown as (or part of) a carry forward amount in computations included with a later return does not create a second opportunity to enquire into the amount of the loss. Similarly, the carried forward amounts included in subsequent returns may not be amended or newly introduced by the company or HMRC once the accounting period in which the losses arose has become final. An enquiry into the amount of a loss that has become final may be possible following a discovery determination (EM3200 onwards).

An enquiry may be opened into a later return reflecting the use of a carried forward loss in a later accounting period. Examples include

• a dispute about whether a trade has continued or whether it has ceased and a new trade commenced, and
• the effect of the relevant liabilities restriction (CTM06250) following a company reconstruction.

See CTM06300 onwards about the disallowance under CTA10/S673 of trading losses following a change in ownership of a company.