Corporation tax refund

[Herbie]

If a company makes a loss one year, can it claim a refund of corporation tax paid in the previous year?

 

[ClubMan]

Any use?

Trading losses

This page explaines how a company can offset trading losses againist Corporation Tax

www.revenue.ie

Trading losses​

If a company sustains trading losses in an accounting period, they can be offset as a means of a relief from tax against:

• other trading income for the same accounting period
• trading income for the immediately preceding accounting period.

 

[Herbie]

Thanks @ClubMan, I had a look at that previously but wasn't clear as to an actual refund was possible as it just mentions offsets. For a company with one income stream (for example, a butcher's shop), there's no additional income stream to offset against. In that scenario, where Revenue say "Those companies can offset a trading loss against their total profits of the immediately preceding accounting period", is it possible to get a refund of the corporation tax paid for the immediately preceding accounting period? If not, what exactly does that offset consist of in real terms?

 

[AAAContributor]

If a company makes a loss one year, can it claim a refund of corporation tax paid in the previous year?

The company could make a claim by revising its previously filed CT1 return and resubmitting via ROS within 2 years of the end of the loss period.

It would set the relevant trading loss against the trading income from the previous year.

The company's Inspector of Taxes then reviews the claim, and if all is in order, a refund will issue.

Any relevant trading loss not fully utilised by the above claim may be carried forward for offset against future income.

where Revenue say "Those companies can offset a trading loss against their total profits of the immediately preceding accounting period"

This sentence is referring to companies carrying on an 'Excepted Trade'. These are trades taxed at 25% where the source of income is from dealing in or developing land, minerals and petroleum activities.