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Any one au-fait with Self Assessment?

I am not sure where/how to fill in the online self assessment form to do this:

Claim previous year's losses in one business to claim relief on this years profits for another business.

It seems like it should be possible to do this (https://www.accaglobal.com/ca/en/technical-activities/technical-resources-search/2014/january/using-trading-losses.html) however I am not sure how to input it on the form.

  • Can you add a country tag, please? I'd guess UK, based on destination of link, and your other question, but it's best you confirm this. – TripeHound Oct 17 at 14:25
  • It only allowed me 5 tags but I'm based in England, trying to fill in my 2018-2019 return @TripeHound – Richard Brigstock Oct 17 at 14:30
  • You could probably drop "taxes", as that is meant for questions not covered by a more specific tag, such as "income-tax". Unfortunately, I don't know the answer to the question, but there may be people watching the "united-kingdom" tag who can. – TripeHound Oct 17 at 14:34
  • @TripeHound I'll try that then thank you for the suggestion – Richard Brigstock Oct 17 at 14:39
  • What are you reading in the link you gave that makes you think it's possible to transfer losses from one business to another like that? I might be missing it but I can't see where you are getting it from. – Vicky Oct 17 at 16:38
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There's a nice guide to what the self employed can do with losses here: https://www.litrg.org.uk/tax-guides/self-employment/working-out-profits-losses-and-capital-allowance/what-if-i-make-loss

The key list (there's more detail on each option on that page) seems to be:

  1. You can use the loss in the current tax year and set it against all of your other income including income from savings. This reduces the tax that would otherwise be payable on your other income. This is also known as sideways loss relief.

  2. You can carry the loss back to the previous tax year and set it against all of your income including income from savings. This reduces the tax due on this income, and a repayment of tax is usually generated.

  3. For a new business, if the loss occurs in any of the first four years of trading you can set it against your total income of the three tax years immediately before the loss year, starting with the income of the earliest year first. This reduces the tax due on this income, and a repayment of tax is usually generated.

  4. You can carry forward a loss and set it against profits of the same trade in a future year. This is generally the default position if the loss cannot be used in any other way. This is likely to reduce the tax that would otherwise be due in a future tax year.

  5. If your business finishes and you make a loss in your last year, you can set this against your trading profits of the previous three years, latest year first. This reduces the tax due on this income, and a repayment of tax is usually generated.

I note none of the options is to carry losses across to another business. However the first option listed above of setting it against other income would appear to achieve much the same result if the other business is profitable. (I also note that HMRC's SelfAssessment notes on the Self Employment pages say things like "Carry your unused losses forward to set against any future profits from the same business")

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