Taxes Consolidation Act 1997 section 1085

Section 1085 restricts the amount of loss relief, excess capital allowances, and group relief a company may claim or surrender where it fails to file its corporation tax return on time.

• Where a company files its return late, claims to offset losses, excess capital allowances, and group relief are restricted by 50%, subject to a maximum restriction of €158,715 per accounting period.
• If the return is filed within two months of the due date, the restriction is eased: loss offsets and group relief claims are reduced to 75% of what they would otherwise be, and surrender amounts are reduced by 25%, subject to a maximum restriction of €31,740.
• A return is treated as not having been filed on time where it is fraudulent or negligent, incomplete, contains uncorrected errors, or fails to include required details of specified reliefs.
• The restrictions do not permanently deny the reliefs — unused losses or offsets may generally be carried forward to a later accounting period, so the main impact for most companies is a cash-flow cost.