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 | 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 Corp Tax Calculations, 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 Corp Tax Calculations 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.
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 carried-forward trading loss cannot outlive its trade. When the trade ceases, whatever is left is lost, and the Loss movement table shows it as Unrelieved on cessation of trade. A loss of the final 12 months can be carried back three years instead: 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.
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 and there is no choice.
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.
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.