Losses brought forward - tax return

ManicMum

Hello there

I am wondering if some kind soul can help me. Doing my tax return here and stuck on one point. I had a small business that suffered a £437 loss in 07/08. IN the 08/09 year, i wound it down and only had a £106 taxable profit. However, when trying to offset the £437 loss against the profit, i get told

'The amount entered for 'Loss brought forward from earlier years set-off against this year's profits' cannot exceed the amount entered for 'Net business profit for tax purposes'. Please check. Eh?

I then wondered if I needed to enter the £437 loss as -437.00. So I did this but it added the 437 loss to the 106 profits and now says i have taxable profits of £543!!

Can anyone help me? Banging my head against wall here. I've done tax returns before but never had this scenario!

many thanks.

fengirl_2

The loss to set off against the profit for this year cannot exceed the profit, therefore the amount of loss to enter is £106.

ManicMum

Hi fengirl. thanks so much for that. What about the rest of the 07/08 loss? Is that lost forever or can i carry over the £331 loss remaining from that to 09/10?

thanks ever so!:beer:

Rolo_Tomasi

You applied to carry the loss forward and therefore it can only be used to reduce future years profits of the same business. Therefore as your business has now been 'wound up' then you cannot get tax relief.

There may be scope to amend how you treated the loss on the 2007-08 Return but for the amount involved its probably not worth the hassle.

ManicMum

thanks. bummer that! Oh well - win some, lose some.