Advice following closure of a business

clem1971 wrote: »

After some advice. I purchased an established business in 2006 and due to health reasons have been forced to close it down. I needed to take out a secured loan to clear business debts etc which amounts to £360 per month over the next 22 years (ouch) As I was a sole trader would I be able to offset that secured debt against my income tax that I am now currently paying through PAYE.

No. You can only carry trading losses against other income of the same year, and if you're not trading anymore, then there's no trading loss. Presumably your business made a whopping loss in its final years if it was raking up huge debts. How did you relieve those trading losses - the usual way is to set against income from other sources, i.e. employment, but that's only for trading losses of the same year. The other way is to carry back the losses to set against earlier years, so if you made profits in earlier years and paid tax, you may have been able to set the losses back, to reclaim some of the tax you paid in the earlier years. Losses and loss relief is complicated, so your accountant (the one who prepared and submitted your loss making accounts) is the person to ask as they'll know the detail/facts. But, no, you can't set future loan repayments against future employment earnings - that's not how it works.