Tax Credits - Trading Losses Carried Forward from Previous Year

olgadapolga

Hi,

I just wondered if someone could clarify something for me? Hopefully this will make sense.

1) My partner made a trading loss in 14/15, which has been carried forward to 15/16. As I understand it, this loss can be offset against the profit he made during 15/16 (as it was the same business), thereby reducing the amount of self-employment income for 15/16.

2) He also had some interest from savings. I think that this should be declared in full for Tax Credits as the trading loss from 14/15 cannot be used to offset the savings interest and can only be applied to the profits made with his business?

3) He also made a donation to charity but it was not a gift-aid donation. I take it that this cannot be counted anywhere (as it was not gift-aid)?

---

So, in summary, I think that we should declare on the tax credits renewal:

Income from self-employment (X) minus trading loss (Y) = £(however much)

Interest from savings = full amount received

Charity donation = £0

---

Do I have this correct or am I getting it wrong?

Thank you for any help

Darksparkle

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/503090/TC825_04_16_1.0.pdf

olgadapolga

Darksparkle wrote: »

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/503090/TC825_04_16_1.0.pdf

Yeah, I looked at that document (several times) and got myself completely confused

Darksparkle

Did you read page 3? Specifically the section about losses brought forward?

Your understanding is correct. The loss could have been deducted from any other income in 2014/15 but if it is brought forward it can only be deducted from income from the same business.

olgadapolga

Thank you @Darksparkle, for your help.