Carry group relief back to previous year?

jilt

I have two associated companies. After R & D enhancement company A has losses of £122873 and company B has profits of £91382. Can company A surrender £91382 of it's losses to company B to wipe out the profits in the current year and then carry back the £31491 to company B's previous year to reduce it's profits?

It would be more of a tax saving to do this rather than company A claim tax credits on the £31491 in the current year however I am not sure if it's allowed and don't seem to be able to find the answer in any guidance.

Any help would be much appreciated.

Monsoon

You're braver than me. I don't touch groups with a bargepole!

Have you checked CCH Online, or gone back to the relevant tax statute?

jilt

I don't touch groups either normally. It's my subcontract work that I've mentioned to you before with a local accountant where I prepare the amended tax comps and tax returns for R & D claims. I've had a few where they have been groups and there's been a surrender of losses that was straight forward but this one had greater losses then the group company's amended profits.

It's sorted now though thanks, I posted on accounting web as well and got the answer I needed which was basically no I can't carry it back to the previous year of a group company. I can surrender it in the current year, and can either utilise the balance for R & D tax credits or carry it forward to next year.

I checked my ATT book and trawled through HMRC guidance but couldn't find what I was looking for. I haven't used CCH, any idea of the cost, is it an annual subscription or a PAYG type of thing?

Monsoon

Jill, CCH Online is provided as part of your MIP subs!!!!!!!

And glad you got the answer. For what it's worth, that was my gut feeling but I wasn't going to guess!!

jilt

Monsoon wrote: »

Jill, CCH Online is provided as part of your MIP subs!!!!!!!

And glad you got the answer. For what it's worth, that was my gut feeling but I wasn't going to guess!!

I had prepared the tax comps etc as though I couldn't carry it back but the guy I do them for had questioned it so I had to double check. He's an ACCA accountant but by his own admission knows nothing about tax and just scraped through his tax exams! Right pair aren't we.

I did actually wonder what I was paying subs for! ..lol I really must log on and see what's available, I very rarely go on there :blushing: Will attempt to have a look while dinners cooking tonight, we're leaving early to enjoy a nice bottle of wine whilst admiring Steve's pumpkin carving skills. Check em out on FB I'll like his post so you can see it.

Have a great Samhain Jenni x

Monsoon

You get loads with your subs!!
ICAEW technical (accounting) advice line too.
I only discovered that and CCH about a year ago - felt like a right dummy!