Made a loss - BS interest is taxed, why?

denisiw

I'm Self Employed. I made a loss in the 08-09 tax year. My income from a pension and building society interest is over the personal allowance limit by £982. I will be taxed £98.20 on this according to the HMRC web site.

Why can't I claim this against my losses?

Denis

fengirl_2

Not sure I understand you.
Your losses and personal allowance can both be offset against your building society interest, so the tax on these two allowances would be repayable.

denisiw

fengirl wrote: »

Not sure I understand you.
Your losses and personal allowance can both be offset against your building society interest, so the tax on these two allowances would be repayable.

I've filled out my Self Assessment online. Looking at Section 6. View your calculation, it shows that my total income received is £7017. This is my pension and BS etc interest. Personal allowance is £6035. £7017 minus £6035, equals £982: total income on which tax is due. They've taxed this at 10%, equals £98.20. They will deduct this from the tax that I've paid on my pension and BS interest. I say will because I haven't submitted my form yet as this doesn't seem right to me.

Denis

ps Going back through the form I thought I'd found the answer, there's a section on Income Tax losses. I've entered the amount they've deducted in there but it doesn't make any difference.

I hate this, it leaves me cold, the language they use to explain things is not easy to understand; it's not plain English by any stretch of the imagination!

fengirl_2

Your pension is more than your tax free allowance, so you will be laible to tax at 20% on the balance of the pension and at 10% on all your building society interest. How much is the loss relief and have you claimed it correctly?

Rolo_Tomasi

Loss relief is claimed on the self employment page. Not sure of the exact box number but there is a section just after where you calculate your loss for the tax year where you say what you want to do with the loss. You are looking for a box which says "set against other income in the tax year". It may be just on the Self Employment Full page - not on the 'Short' page.

laurel7172

I think, possibly, depending on how much the loss is, and how much your profit was last year, it might be more advantageous to carry it back to previous years. That is, if you made a bigger profit in the last three years than the loss this year, you could potentially get a refund for the whole loss at 20%, rather than £982 at 10%.

http://www.bytestart.co.uk/content/taxlegal/9_6/trading-loss-relief.shtml