That’s according to the Institute’s Northern Ireland Tax committee in its response (see here) to the consultation “Reforms to corporation tax loss relief: consultation on delivery”. The Committee expressed its concern that the proposed reforms come at a time of economic uncertainty in the wake of the EU referendum outcome.

The proposals in the consultation will apply to companies only and are as follows:-

• losses arising from 1 April 2017 can be carried forward and set against the taxable profits of different activities within a company and the taxable profits of its group members; and
• the amount of annual profit that can be relieved by carried-forward losses will be limited to 50% from 1 April 2017, subject to an allowance of £5 million per group

The Committee framed its response to focus on the following key issues: – treatment of pre-April 2017 losses, complexity, exchequer impact, transitional provisions and anti-avoidance legislation.

A number of key recommendations were also made which included extending the new flexibility for losses to all losses including those pre-April 2017, increasing the £5 million loss allowance and widening the scope of the terminal loss relief provisions such that terminal losses can be used in the previous 3 years within the wider group.