can I offset self employment loss against employment tax paid

[tpee]

This is my second trading year and have made a loss and was in employment paying PAYE prior to this. I have been reading online about carrying a loss forward and also that you may be able to take it back and claim against tax paid when employed to claim a refund. Any advise regarding this would be greatly appreciated as this would help a great deal at the moment. Thanks

[elainec100@cheapaccounting]

here is the help sheet on losses.

http://www.hmrc.gov.uk/helpsheets/hs227.pdf

When were you under paye?

[elainec100@cheapaccounting]

Info you need:

Trade losses can be relieved in a number of ways:
• by reducing your income for the year ended 5 April 2010 and if your
income is nil or less than the loss
• by reducing your capital gains for the year ended 5 April 2010
• by claiming for relief to be calculated by reference to your income for
earlier years or your capital gains for the year ended 5 April 2009
• by claiming for relief to be calculated by reference to profits of the same
trade taxed in earlier years
• by carry forward against future profits of the same trade or income from
the company (where you transfer your trade to a company in exchange for
shares in that company), or post cessation receipts.

[tpee]

Originally Posted by elainec100

When were you under paye?

Hi, thanks for replying.
I was employed up to May 08 when I got made redundant and set up my own business. I claimed some tax back on my 1st return that I had paid in this employment covering April and May as my Self Employed business didn't make as much as my personal allowance.

[elainec100@cheapaccounting]

Only the fact of it the losses will need to be carried forward and off set against future profits.

I expect you claimed all of the tax back on paye earnings in 200/ / 2009.

[David Griffiths]

Were you employed and paying tax in the years 2006-07 up to 2007-08?

A loss in the first four years of a new business can be carried back and set against general income for the three preceding years, earliest first. So if your loss is in 2009-10 you can carry that back to 2006-07

[tpee]

Originally Posted by David Griffiths

Were you employed and paying tax in the years 2006-07 up to 2007-08?

A loss in the first four years of a new business can be carried back and set against general income for the three preceding years, earliest first. So if your loss is in 2009-10 you can carry that back to 2006-07

Yes I was employed in 2006/07, so I can claim some tax back for this period based on my 09/10 trading loss?

[David Griffiths]

Yes. Put the loss in box 78. You will then need to write to HMRC quoting this loss and claiming relief against income of 2006-07

This is a manual process and could take a couple of months (or more)

[tpee]

thank you very much.

[Duckpool]

[Trade losses can be relieved in a number of ways:
• by reducing your income for the year ended 5 April 2010 and if your
income is nil or less than the loss
• by reducing your capital gains for the year ended 5 April 2010
• by claiming for relief to be calculated by reference to your income for
earlier years or your capital gains for the year ended 5 April 2009
• by claiming for relief to be calculated by reference to profits of the same
trade taxed in earlier years
• by carry forward against future profits of the same trade or income from
the company (where you transfer your trade to a company in exchange for
shares in that company), or post cessation receipts.[/quote]

Is the above applicable to a sole trader only or does it apply to a limited company as well.

I retired 2 years ago and receive a company pension. I started a limited company about the time I retired and have made a loss in both the first 2 years - can I offset these losses against the income (company pension) I receive?

I would appreciate any guidance you can give.

Regards