Offset tax rebate

corncob82

I will let you know what happens :-)

Icequeen99

martindow wrote: »

Are you sure? This looks like examples of carrying losses forward within the business. I can't see any reference to setting it off against PAYE income.

Yes you can do this. It is called 'sideways' loss relief. You don't have to, you could choose to carry it forward against profits from the same business.

See this helpsheet which explains each of the ways you can relieve a loss - the first one is what the OP has done and set it against his other income for the same tax year.

http://www.hmrc.gov.uk/helpsheets/hs227.pdf

IQ

purdyoaten

martindow wrote: »

Are you sure? This looks like examples of carrying losses forward within the business. I can't see any reference to setting it off against PAYE income.

You have the option to set losses against total income from all sources including capital gains in that year.

There are other ways to relieve losses, possibly beyond the scope of the question.

If the loss cannot be relieved in this way it will be carried forwrad to future profits FROM THE SAME TRADE.

Percy1983

I am pretty sure as a sole trader you can claim it against PAYE, not really looked at this for a while and the amount limits involved but in short its means you tax code is increased so you can earn that amount extra tax free I believe.

Personally I had this option in year one and I just carried the loss forward

purdyoaten

Percy1983 wrote: »

I am pretty sure as a sole trader you can claim it against PAYE, not really looked at this for a while and the amount limits involved but in short its means you tax code is increased so you can earn that amount extra tax free I believe.

Personally I had this option in year one and I just carried the loss forward

Absolutely not and could not be more incorrect! Losses are set against taxable income. For example a loss at self-employment of £1000 can be relieved against PAYE but full relief would only be obtained if £1000 of income was taxed! If you have paid no tax at PAYE the loss is unrelievable and should be carried forward.

Percy1983

purdyoaten wrote: »

Absolutely not and could not be more incorrect! Losses are set against taxable income. For example a loss at self-employment of £1000 can be relieved against PAYE but full relief would only be obtained if £1000 of income was taxed! If you have paid no tax at PAYE the loss is unrelievable and should be carried forward.

Thats a better answer to what I meant.

Without knowing the income from the full time job and the full extent of the loss made its hard to make the call, but to keep it simple if you believe you will make a profit going forward just carry it forward.

motorguy

martindow wrote: »

Are you sure? This looks like examples of carrying losses forward within the business. I can't see any reference to setting it off against PAYE income.

Yes, its legal and it works.

I've just done it with my business. I work full time and my part time business made a small loss.

Refund is coming back to me from HMRC. They've let me know by letter its being processed.

corncob82

Just a quick update to let you all know that I received my cheque in the post today, thanks to everyone who helped