What is loss carry back?
The government recently announced a loss carry back measure to encourage new investments. This new law came into effect 1 January 2021 and could influence your company’s tax position in 2021 or 2022.
Your business could claim a refundable tax offset up to the amount of their prior liability. Cash refunds can be generated by carrying back allocated tax losses.
Your business may be eligible if:
- Your business is a corporate limited partnership, company, or a public trading trust, and was registered as such during the year you want to claim the business tax offset
- The business had an income tax liability in 2019, 2020 or 2021 financial years
- The business made a loss in the 2020, 2021 or 2022 financial years
- The aggregated turnover of the business was less than $5 billion
- Your tax return lodgement obligations for the last five years are up to date.
When completing the 2021 Financial Year accounts, here at Nurture, we will be reviewing each potential business and be in touch to discuss the rules around eligibility, integrity, and tax offset calculation and how they influence your company’s business tax. You can only claim the tax loss once, so you must get advice about how and when to apply this measure to your business.
TLDR: Claim money back from previous tax years, if your business made a loss in the most recent financial year.
Not to worry, we’re here to help and make sure you can claim every possible cent back. We’re hoping that this government initative will help businesses in recovering from potential losses, and set them up for the future.
To find out more, go to: www.ato.gov.au/business/loss-carry-back-tax-offset
Alternately, please just contact us directly with any concerns you have, and we will do out best to help you out wherever possible. Look forward to hearing from you.
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