Offsetting loss against other income
Options
LaurenS
Registered Posts: 8
A sole trader client uses cash basis accounting and has made a loss in the first year. Client is also employed and is a higher rate tax payer. Can the loss be taken into account against the income from employment or should the loss be carried forward against potential future profits?
0
Comments
-
AS the cash basis has been used then sideways relief is not available. Losses can only be carried forward for reief against profits from the same trade. A check should be made to see if preparing the accounts on an accruals basis may be better for the client as then sideways relief would be available.Regards,
Burg2 -
If the stock is not that much nor the debtors/prepayments etc then as Burg says using an accruals basis may make sense to use the loss.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.4K For AAT students
- 264 NEW! Qualifications 2022
- 144 General Qualifications 2022 discussion
- 9 AAT Level 2 Certificate in Accounting
- 45 AAT Level 3 Diploma in Accounting
- 66 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 268 VAT
- 90 Software
- 271 Tax
- 133 Bookkeeping
- 7.1K General accounting discussion
- 195 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 578 Job postings
- 16 Who can benefit from AAT?
- 35 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership