Income tax losses in Self Assesment

Candy_Red

I'm not new to SA, but my circumstances have varied so much each year, it has always been rather complicated filing online. Basically, the last few years I have been employed, self-employed and a partner in a business, and usually all 3 to a varying degree.

For 2011-12, I was employed on a very very small scale for part of the year, earnt around £8.5k as self-employed, but had a loss of around £9k to cover from the partnership, so in effect, my actual income for the year was around £400 loss overall.

My problem is section 4 on the online assessment , entitled "Income tax losses"

There are 4 boxes:
1) Earlier years losses (which can be set against certain other income in 2011-2012)
2) Unused losses carried forward
3) Relief now for 2012-13 trading, or certain capital losses
4) Year for which you are claiming relief above.

So I need to know....do I need to fill in this section at all? And if so, with what?
As it is, I will not pay any tax this year, but may possibly next year depending how the business goes. So if poss I would like to carry forward any loss I can to save on tax next year. Can I do this and how much?

Thanks for reading, hope someone can help.

CrazyChris

Candy_Red wrote: »

I'm not new to SA, but my circumstances have varied so much each year, it has always been rather complicated filing online. Basically, the last few years I have been employed, self-employed and a partner in a business, and usually all 3 to a varying degree.

For 2011-12, I was employed on a very very small scale for part of the year, earnt around £8.5k as self-employed, but had a loss of around £9k to cover from the partnership, so in effect, my actual income for the year was around £400 loss overall.

My problem is section 4 on the online assessment , entitled "Income tax losses"

There are 4 boxes:
1) Earlier years losses (which can be set against certain other income in 2011-2012)
2) Unused losses carried forward
3) Relief now for 2012-13 trading, or certain capital losses
4) Year for which you are claiming relief above.

So I need to know....do I need to fill in this section at all? And if so, with what?
As it is, I will not pay any tax this year, but may possibly next year depending how the business goes. So if poss I would like to carry forward any loss I can to save on tax next year. Can I do this and how much?

Thanks for reading, hope someone can help.

I don't currently have time to read through and check for you, but Helpsheet 227 may help - COLOR=Magenta]hmrc.gov.uk/helpsheets/hs227.pdf[/COLOR][COLOR=Magenta][COLOR=Black
[/COLOR]
[/COLOR]Failing that, give HMRC a call and ask them, they should be able to help
(check out saynoto0870.com to get a non-0845 number!)

Edit: I believe you have to use the losses 'as soon as possible', before personal allowances (so you couldn't use part of your losses to bring income for the year down to 8,105) However, you may be able to carry the loss back to a previous year - reducing the previous year's taxable income and thus receiving a rebate.

I may be completely wrong though! Best to call and ask!

Candy_Red

Thanks for your reply CrazyChris. Looks like I may have to call them after all.
All the helpsheets seem to do is confuse me even more

nomunnofun

Candy_Red wrote: »

I'm not new to SA, but my circumstances have varied so much each year, it has always been rather complicated filing online. Basically, the last few years I have been employed, self-employed and a partner in a business, and usually all 3 to a varying degree.

For 2011-12, I was employed on a very very small scale for part of the year, earnt around £8.5k as self-employed, but had a loss of around £9k to cover from the partnership, so in effect, my actual income for the year was around £400 loss overall.

My problem is section 4 on the online assessment , entitled "Income tax losses"

There are 4 boxes:
1) Earlier years losses (which can be set against certain other income in 2011-2012)
2) Unused losses carried forward
3) Relief now for 2012-13 trading, or certain capital losses
4) Year for which you are claiming relief above.

So I need to know....do I need to fill in this section at all? And if so, with what?
As it is, I will not pay any tax this year, but may possibly next year depending how the business goes. So if poss I would like to carry forward any loss I can to save on tax next year. Can I do this and how much?

Thanks for reading, hope someone can help.

You are correct in doing nothing as the default position is to carry the loss forward against future income from the same trade. Just remember this next year as 'unused losses carried forward'.

Candy_Red

So, I delete the Income Tax Losses section altogether, and by default it will carry forward?
All I need to do is make a note of my total overall loss and next year when I fill it in I put my -£400 (ish) in the "Earlier years losses (which can be set against certain other income in 2012-2013)" part?

nomunnofun

There will be a figure in this box:

Net business profit for tax purposes: £

You need to make sure that the same figure is entered here on the following page.:


Total loss to carry forward after all other set-offs including unused losses brought forward:£

Unfortunately it is very difficult to recreate the scenario unless actually filing a return but, hopefully, that helps!

Candy_Red

Thanks. I'll give it a try. Really appreciate your help