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How to carry forward loss from the previous year

I had a loss of several thousand GBP in the first year of operation. After I did the year-end process this loss has been moved to the Retained Profits Account which is OK.

But how can I use this loss against the profit from the next year (current year) so that I actually pay less Corporation Tax? When I do the Tax Report for the current year I don’t see this loss from the previous year anywhere, and the Est. Corporation Tax to be paid doesn’t take that loss into account. Do I need to introduce it manually?

Tax losses are different from accounting losses. Tax losses stay in your tax computations for actual tax return. QF tax summary is just an indication not exact proper tax computation , also it cannot be submitted to HMRC anyway. You will have to manually workout tax using any losses from previous year and incorporate in QF

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@FaradayKeynes thanks for a quick answer. I will use an accountant to file my Annual Accountants anyway so I guess this will not be a problem but I’d like to see Estimated Corporate Tax after taking into account the loss carried forward, any idea what’s the best (proper) way to include the loss from previous year in my QF accounts so that they are there for the tax reports etc.?

The only way the loss would show is in the balance sheet where it reduces the corporation tax liability. There isn’t anywhere else other than the reduction in retained profit.

But if you know the loss amount you can simply just use a calculator and deduct the figure from your profit before calculating the tax due.

thanks for the answer @Paul_Courtier !

As @FaradayKeynes said, the loss you can use against next year is a tax loss, so can not be shown anywhere in your accounts.
The accounts may show either a profit or a loss, which will then be adjusted for disallowable expenditure and possibly any capital allowances, to arrive at your tax loss. These adjustments are on the tax return only, they are not accounting adjustments so you don’t show them anywhere in your accounts.
Personally I would ignore the tax calculation in QF as it’s not particularly useful.

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