Just wondered if anyone can help me with offsetting losses when completing a Self Assessment Tax Return. When claiming self employed losses against profits, does the whole loss have to be offset or can just part of the loss be used with the remainder carried forward?
For example, if in Year 1 a loss of £2000 is made, and in Year 2 a profit of £7000 is made, does the whole £2000 loss have to be offset against the £7000 profit or can just enough of the loss necessary to bring it below the personal allowance threshold be used, with the remaining unused loss being carried forward against year 3.
Hope that makes sense!
Many thanks in advance,
Chris
-- Edited by ChrisG on Sunday 17th of July 2011 04:32:37 PM
-- Edited by ChrisG on Sunday 17th of July 2011 04:38:21 PM
As an example of how regular bookkeeping can benefit a client, I mention that knowing these figures before the tax year is over means that decisions can be made to maximise the PA, especially if a client is carrying forward a loss from a previous year.
Nothing like mentioning that most of the income in the next month will be tax free if there is enough gaps between the loss/PA/income ratio. Can be very motivating and show how useful we are. That's my penn'orth.
