CT600 Box 225: Trading Losses Carried Back
Box 225 on the CT600 is for trading losses being carried back to previous accounting periods. This allows you to claim a refund of tax already paid in earlier years.
What Goes in Box 225?
Box 225 captures the amount of current year loss you're claiming against profits from previous periods. This results in a refund of Corporation Tax already paid.
If your company is profitable or not carrying losses back, Box 225 will be zero.
How Loss Carry Back Works
The Basic Principle
When your company makes a trading loss, you can:
- Carry it back to the previous 12 months
- Offset against profits from that earlier period
- Receive a refund of tax already paid
Time Limits
Standard carry back period:
- 12 months before the loss-making period
- Up to 3 years in certain circumstances
When to Use Loss Carry Back
Carry Back Makes Sense When
- You made a loss this year
- You paid Corporation Tax in the previous year
- You want a cash refund now
- You may not have future profits to use the loss against
Consider Carrying Forward Instead If
- You expect higher profits (and higher tax rates) in future
- You want to preserve reliefs in the prior year
- The prior year profits were minimal
Calculating Box 225
Example 1: Full Carry Back
Previous period:
- Profits: £80,000
- Tax paid: £15,200 (19%)
- Trading loss: £50,000
- Box 225: £50,000
- Refund: £50,000 × 19% = £9,500
Example 2: Partial Carry Back
Previous period:
- Profits: £30,000
- Tax paid: £5,700
- Trading loss: £50,000
- Maximum carry back: £30,000 (limited to prior profits)
- Box 225: £30,000
- Remaining £20,000 carries forward
Loss Carry Back vs Carry Forward
| Feature | Carry Back (Box 225) | Carry Forward (Box 220) |
|---|---|---|
| Direction | Previous period | Future periods |
| Time limit | 12 months back | Indefinite forward |
| Benefit | Immediate refund | Future tax reduction |
| Certainty | Known (tax already paid) | Depends on future profits |
Decision Framework
``` Loss made this year ↓ Did you pay tax last year? ↓ Yes ↓ No Carry back? → Carry forward ↓ Yes Box 225 → Box 220 (future) ```
The Carry Back Claim Process
Step 1: Calculate the Loss
Ensure you have a genuine trading loss:
- Income minus allowable expenses
- After capital allowances
- This goes in Box 170
Step 2: Decide How Much to Carry Back
You don't have to carry back the full loss:
- Can carry back part
- Carry forward the rest
- Consider which gives best overall result
Step 3: Complete the CT600
- Box 170: Current year trading loss
- Box 225: Amount carried back
- Submit with explanation of carry back claim
Step 4: Receive Refund
HMRC will:
- Process the claim
- Calculate the refund due
- Issue payment (usually within weeks)
Limitations on Carry Back
Amount Limits
- Cannot exceed profits of the prior period
- Cannot create a loss in the prior period
- Subject to any restrictions from that period
Time Limits
- Claim must be made within 2 years of the loss-making period end
- Standard 12-month carry back (or extended if applicable)
Same Trade Requirement
- Loss must be from the same trade
- Trade must have been carried on in both periods
Related Boxes
| Box | Description |
|---|---|
| 170 | Current trading loss |
| 215 | Gross profits |
| 220 | Losses brought forward |
| 225 | Losses carried back (this box) |
| 235 | Total profits |
Common Questions
Can I carry back a loss from my first year of trading?
Only if there were profits in a previous period with the same trade. A completely new company can't carry back to before it existed.
What if I want to carry back and carry forward?
You can split the loss:
- Part in Box 225 (carry back)
- Rest carries forward for future claims
How long does the refund take?
Typically 2-4 weeks after HMRC processes the return, assuming the claim is straightforward.
My company was loss-making last year too - can I still carry back?
Only against profits. If there were no profits last year, there's nothing to carry back against. The loss must carry forward instead.
Do I need to amend the previous year's return?
No. The carry back is claimed on the current year's CT600. HMRC adjusts the previous year internally and issues the refund.
When Using TinyTax
TinyTax handles loss carry back claims:
- The software identifies when a loss has occurred
- You can specify how much to carry back
- Box 225 is populated appropriately
- The claim is included in your submission
Related Articles
- CT600 Box 170: Current Trading Losses
- CT600 Box 220: Losses Brought Forward
- Corporation Tax Losses Guide
- CT600 Boxes Explained
Need Help?
TinyTax can help you claim loss carry back relief. If you're unsure whether to carry back or forward, consider the cash flow benefit of a refund now versus potential future savings.
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