Self employment

julzd

When HMRC look at the 3 years of books to calculate self employment payment do they take into account any years with a profit loss or is it only years in which the business made profit?

Jeremy535897

Losses are counted as well. See examples here:
https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme

julzd

Thanks we have read this but still isn’t clear if a loss is taken into account 

Jeremy535897

This example in the guidance shows it clearly:

If you have traded for all 3 tax years

To work out your average trading profit we add together all profits and losses for all 3 tax years that you’ve had continuous trade, then divide by 3.

Example

	2016 to 2017	2017 to 2018	2018 to 2019	Average trading profit for the 3 tax years
Trading profit or loss	£60,000	£60,000	£30,000 loss	£30,000