Carrying loss back to previous years...

Lucy_M Registered Posts: 136 ? ? ?
I am in need of some advise please... I have a client who has made a loss this year and I want to take the loss back to the last year he paid tax as he is getting on a bit now and, as a builder, I don't think he is likely to be working for many more years... The last year he paid tax was 10-11. My problem is I can't see his calculation to see how much his profit was, only the tax paid (£1088.40) this figure will also include class 4 nic's of course, so what is the best way to proceed? There is no chance of him having his copy of the paperwork (terrible records and wife who did returns for him is recently deceased), it does not give me the option online to view the return, if I call HMRC on Monday will they be able to give me the figures or should I use trial and error to work it out?

Hope I haven't missed something obvious and thank you in advance for any help!



  • CeeJaySix
    CeeJaySix Registered Posts: 645
    My understanding is that unincorporated trading loss relief is only available for the current and prior year against general income under s64 ITA 2007 (any unrelieved loss can also be set against capital gains for c/y and/or p/y under s261B TCGA 1992). Only other option is carry forward under s83 ITA against future trading profits.

    Exception being early years of trade (new sole trade can carry back up to 3 years on FIFO basis against general income - s72 ITA) or on cessation (can carry back 3 years on FIFO basis against trading income from same trade - s89 ITA). If neither of these apply I don't believe you can carry back to 10/11.

    I work with Ltd companies rather than unincorporated businesses (the wording of your post seems to imply unincorporated though doesn't specify explicitly), so this is from ACA tax exam studies only rather than practical experience, so I stand by to be corrected/enlightened.

  • Lucy_M
    Lucy_M Registered Posts: 136 ? ? ?
    Hi CeeJay, he is a sole trader and I too thought only one year was allowed, but the online self assessment form allowed losses to be taken back 4 years. I'm fairly new to practise and he's my first client to make a loss, I had a feeling I'd forgotten something obvious, the fact that he could go back that far if he was a NEW sole trader!
    Thank you for your help :)
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