Coronavirus is likely to have hit businesses harder in 2020/21 than in the previous tax year. However, how can you ensure you maximise tax reliefs as soon as possible?

2020 filing

It’s getting to the time of year when you’ll be busy filing the 2019/20 tax returns. Many of you will understandably be apprehensive about the forthcoming payment deadline. However, for some – especially unincorporated businesses – there may be opportunities to accelerate tax reliefs.


The coronavirus lockdown started in March 2020. As a result, it’s likely that 2020/21 will be the tax year that you are hardest hit in terms of trading profits. Because of the way that the self-assessment system works, you could now find yourself having to pay tax on old profits whilst struggling with cash flow.


If your current year end will pass before you file the 2019/20 tax return, check to see if you can carry back a loss.


Bert prepares his accounts to 31 October each year. The results for the year to 31 October 2019 were profits of £18,000. However, the results for the year to 31 October 2020 show a loss of £10,000 as a result of lost trading. Instead of waiting to file the 2020/21 return, Bert can effect relief in 2019/20 by adjusting the tax due on the calculation pages of the tax return. The box you need is 15 on page TC2.

Pro advice

If the loss is offset sideways against general income, rather than just reducing the trading profits, don’t forget to record the loss for Class 4 NI purposes once the trade returns to a profit.


Generally, capital losses can’t be carried back. However, if you have sold shares that qualify for share loss relief, these can be carried back to 2019/20 in the same way as trading losses.


It’s also possible to carry back relief for any donations under gift aid that are made before the 2019/20 tax return is filed. However, care is needed here. A recent court case confirmed that in order to carry back relief, the donations need to be included on the first filing of the return. You can’t amend a client’s return to include them if you miss the opportunity the first time around.

Look to include an adjustment for trading losses from 2020/21 where possible if your year end occurs before the date the return is filed. You can also look to carry back losses on certain shares in the same way.

This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit or call 01233 653500.