Tax Rebate

[teamjoel]

Hi all,

I am due an income tax rebate from the tax year ending April 2011.

For the 1sthalf of the year, I was running my own business (equal partnership) which made a loss

For the 2nd half of the year, I was in full time employment, paid via PAYE.

Would the loss in half 1 be deducted from the earnings made in half 2 to give my total income for the year for tax rebate purposes?

e.g.

half 1 loss = 5,000
half 2 PAYE earnings = 10,000

Total income for year: 10,000 – 5,000 = 5,000

If this is the case, I would receive a higher tax rebate…

Thanks in advance.

 

[Abacus Accountants]

Yes, you are basically correct in that you can offset your partnership loss against other income. If the partnership had been established for a few years it may have a different year end date to the tax year. In this case you would declare your share of the loss for the year ending during 2010-11. For example if the partnership accounting period ended on 30th June 2010, this would be the relevant period for your 2010-11 tax return. However if the partnership ceased before 5th April 2011 your accounting period would be different again.

 

[MyAccountantOnline]

Do make sure that you are looking at the tax adjusted figure though - their are special rules for how business profits/losses are calculated and it is rarely the same figure as appears in that accounts if that's what you are looking at.