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Self Assessment - Previous Years Losses
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Little_Miss_Penny_Less
Posts: 219 Forumite
in Cutting tax
Hi All,
I'm getting myself tied up in knots overthinking this and reading too many posts on the internet so hoping someone can just tell me if I'm doing this correctly or not (or what I should be doing!)
I'm filling in my Self Assessment online. This is the first year I have made a profit so I want to offset previous years losses against this years profit. I have entered in this years profits and losses and the total now stands at £15629.00
Previous losses were (approx.):
11-12 -£8000
12-13 -£2500
13-14 -£100
Should I
a) claim all of the losses against this years profit to get to the lowest amount this year
b) factor in the personal tax allowance of £10,000 and therefore only 'use' £5629 of losses against this years (i.e. keeping the remainder of losses against future years)?
c) A few internet searches are suggesting that a loss must be used in it's entirety, so would I need to use the whole £8000 of 11-12's loss for example?
Many thanks
I'm getting myself tied up in knots overthinking this and reading too many posts on the internet so hoping someone can just tell me if I'm doing this correctly or not (or what I should be doing!)
I'm filling in my Self Assessment online. This is the first year I have made a profit so I want to offset previous years losses against this years profit. I have entered in this years profits and losses and the total now stands at £15629.00
Previous losses were (approx.):
11-12 -£8000
12-13 -£2500
13-14 -£100
Should I
a) claim all of the losses against this years profit to get to the lowest amount this year
b) factor in the personal tax allowance of £10,000 and therefore only 'use' £5629 of losses against this years (i.e. keeping the remainder of losses against future years)?
c) A few internet searches are suggesting that a loss must be used in it's entirety, so would I need to use the whole £8000 of 11-12's loss for example?
Many thanks
0
Comments
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You are not far off the mark. Losses carried forward MUST be used against future profits of the same business. The loss brought forward from 2013/14 is £10600. If your profit in 2014/15 is £15629 this will be reduced to to £5029 after loss relief - some 5571 of personal allowances will be 'wasted'.
So a) is correct. I am not sure whether you would have capital allowances to claim in 2014/15. If so you could choose not to claim them, thereby increasing your profit. More of your losses could be utilised without wasting personal allowances.0 -
Thanks Purdyoaten2 - so it has to be the whole amount of the losses combined brought forward. That does seem wasteful! Oh well...0
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Little_Miss_Penny_Less wrote: »Thanks Purdyoaten2 - so it has to be the whole amount of the losses combined brought forward. That does seem wasteful! Oh well...
You may wish to read my post again - I edited it after yours.0 -
Ah, thank you - unfortunately no capital allowances!0
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