Melissa Geiger, Head of International Tax and Tax Policy for KPMG UK, comments on Tuesday’s announcement by HMRC.
Melissa Geiger, Head of International Tax and Tax Policy for KPMG UK, comments on Tuesday’s announcement by HMRC: “As a reaction to COVID-19, HMRC has published updated guidance confirming that in exceptional circumstances, it will consider corporation tax repayment claims for previous periods. Claims will take into account an anticipated carry back of excess trading losses from the current period into a previous period. This is a significant and welcome development for heavily loss-making companies in FY20 who were profitable in FY19.
“The change means that HMRC could consider repayment claims as long as there are ‘exceptional circumstances’. Our understanding is that ‘exceptional circumstances’ means that a company must have evidence to suggest the trade losses in the current accounting period are likely to be so large that they will comfortably exceed any other relevant income in the current accounting period. This will give rise to an amount available to carry back to the prior period.
“Businesses should be aware, however, that this does not mean that all claims will be accepted. They will be reviewed carefully by HMRC on a case by case basis and HMRC have said companies will need to provide ‘full evidence’ to support any claims.”
For media enquiries only, please contact:
Helen Jackson, KPMG Corporate Communications
M: 0118 3731 479
Follow us on twitter: @kpmguk
KPMG Press Office: +44 (0)207 694 8773
KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 17,600 partners and staff. The UK firm recorded a revenue of £2.40 billion in the year ended 30 September 2019. KPMG is a global network of professional firms providing Audit, Tax, Legal and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
© 2021 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.