Loss Relief

Moobag

Would someone be able to help me.

I have a client who has made a loss in 07-08 (368.00) and 08-09 (3804.00) I know I can carry this forward but have never come across the Loss relief.

I have printed out the help pages from HMRC but they are a bit confusing, just wondered if someone would be able to tell me if I can claim loss relief or not and how do I go about it.

Thanks

Psyche

If this is a trading loss then yes it can be offset against future trading losses. When completing the 08-09 return, instead of the loss put zero as the profit figure and carry the loss forward in a loss memo. You will then be able to offset it against any trading profits made in 09-10 and beyond.

However you first need to offset the trading loss against any other profits for the current year, such as bank interest or capital gains.

deanshepherd

You don't need to offset the trading loss against other income first, but you can if you want.

You can also set either loss against other income of the prior year or even three prior years if these are early years of trade.

Lots of options..