Corporation Tax Act 2009 section 1062

Restriction on losses carried forward where tax credit claimed

Section 1062 prevents a company from both claiming an R&D tax credit on a trading loss and carrying that same loss forward for relief against future profits.

• When a company claims an R&D tax credit for an accounting period, the trading loss available for carry forward is reduced
• The reduction equals the amount of the surrenderable loss on which the R&D tax credit claim is based
• This prevents double relief — a company cannot use the same loss both as an R&D tax credit and as a carry-forward loss against future profits
• The carry-forward rules affected are those allowing trading losses to be set against future trade profits or total profits