Loss from one self-employment not being factored into tax return

TRBob

I just completed my 2023-2024, checked the current position and the Jan 2025 payment looks too high.

My primary self employment made ~£30K profit and my second (new) self employment made ~£5K loss. But the loss does not seem to have been factored into the calculation.

Do I need to specifically enter the loss in the Losses section for this second self employment?

It says 'Do not make this claim if you're using cash basis.' What is the alternative? I know know much money I made and how much money I spent on the business, what it was for and when.

MattMattMattUK

TRBob said:

I just completed my 2023-2024, checked the current position and the Jan 2025 payment looks too high.

My primary self employment made ~£30K profit and my second (new) self employment made ~£5K loss. But the loss does not seem to have been factored into the calculation.

Do I need to specifically enter the loss in the Losses section for this second self employment?

It says 'Do not make this claim if you're using cash basis.' What is the alternative? I know know much money I made and how much money I spent on the business, what it was for and when.

When you say self employment, do you mean sole trader or a limited company? If you mean proper self employment you cannot have more than one, there is just you, trading as a sole trader, as such and profits or losses are across all of your trades and not split out into separate profits in one and losses in another. 

TRBob

From the HMRC self assessment - How many self-employed businesses did you have? I answered 2. Neither are limited companies, they are distinct from each other.

Jeremy535897

Are you using the cash basis? If so, for 2023/24, any loss can only be carried forward against future profits from the same trade. If not, did you claim the loss sideways in box 33 of SA103S? You will also need to include an adjustment to class 4 for the loss.

TheSpectator

MattMattMattUK said:

TRBob said:

I just completed my 2023-2024, checked the current position and the Jan 2025 payment looks too high.

My primary self employment made ~£30K profit and my second (new) self employment made ~£5K loss. But the loss does not seem to have been factored into the calculation.

Do I need to specifically enter the loss in the Losses section for this second self employment?

It says 'Do not make this claim if you're using cash basis.' What is the alternative? I know know much money I made and how much money I spent on the business, what it was for and when.

When you say self employment, do you mean sole trader or a limited company? If you mean proper self employment you cannot have more than one, there is just you, trading as a sole trader, as such and profits or losses are across all of your trades and not split out into separate profits in one and losses in another. 

Sorry, but you are wrong on that.

Dazed_and_C0nfused

MattMattMattUK said:

TRBob said:

I just completed my 2023-2024, checked the current position and the Jan 2025 payment looks too high.

My primary self employment made ~£30K profit and my second (new) self employment made ~£5K loss. But the loss does not seem to have been factored into the calculation.

Do I need to specifically enter the loss in the Losses section for this second self employment?

It says 'Do not make this claim if you're using cash basis.' What is the alternative? I know know much money I made and how much money I spent on the business, what it was for and when.

When you say self employment, do you mean sole trader or a limited company? If you mean proper self employment you cannot have more than one, there is just you, trading as a sole trader, as such and profits or losses are across all of your trades and not split out into separate profits in one and losses in another. 

I don't know where you have got that idea from but its completely wrongm

TRBob

Jeremy535897 said:

Are you using the cash basis? If so, for 2023/24, any loss can only be carried forward against future profits from the same trade. If not, did you claim the loss sideways in box 33 of SA103S? You will also need to include an adjustment to class 4 for the loss.

Yes I used the cash basis, what are the alternatives? I can still amend my return.

I use the self assessment through the gov.uk website so cannot see which box 33 is or even what SA103S is. But yes claiming the loss sideways is my intention.

Dazed_and_C0nfused

TRBob said:

Jeremy535897 said:

Are you using the cash basis? If so, for 2023/24, any loss can only be carried forward against future profits from the same trade. If not, did you claim the loss sideways in box 33 of SA103S? You will also need to include an adjustment to class 4 for the loss.

Yes I used the cash basis, what are the alternatives? I can still amend my return.

I use the self assessment through the gov.uk website so cannot see which box 33 is or even what SA103S is. But yes claiming the loss sideways is my intention.

That is your problem.

The SA103S is the paper Self Employment (short) pages of a Self Assessment return

You might find this worth a read.

https://www.litrg.org.uk/working/self-employment/calculating-self-employed-profits/accounts-cash-basis

Jeremy535897

TRBob said:

Jeremy535897 said:

Are you using the cash basis? If so, for 2023/24, any loss can only be carried forward against future profits from the same trade. If not, did you claim the loss sideways in box 33 of SA103S? You will also need to include an adjustment to class 4 for the loss.

Yes I used the cash basis, what are the alternatives? I can still amend my return.

I use the self assessment through the gov.uk website so cannot see which box 33 is or even what SA103S is. But yes claiming the loss sideways is my intention.

Information on amending a tax return:
https://www.litrg.org.uk/tax-nic/how-tax-collected/self-assessment-and-tax-returns/amending-tax-return
https://www.gov.uk/self-assessment-tax-returns/corrections
I am not sure you can amend it to change to the accruals basis of accounting, but if you do, there will be transitional adjustments.
Look at SA103S and you can see box 33, so you can look at what you filed and find the equivalent. Class 4 NIC also needs consideration.
https://www.gov.uk/government/publications/self-assessment-self-employment-short-sa103s
I suspect you would be wise to seek advice.

TRBob

Jeremy535897 said:

TRBob said:

Jeremy535897 said:

Are you using the cash basis? If so, for 2023/24, any loss can only be carried forward against future profits from the same trade. If not, did you claim the loss sideways in box 33 of SA103S? You will also need to include an adjustment to class 4 for the loss.

Yes I used the cash basis, what are the alternatives? I can still amend my return.

I use the self assessment through the gov.uk website so cannot see which box 33 is or even what SA103S is. But yes claiming the loss sideways is my intention.

Information on amending a tax return:
https://www.litrg.org.uk/tax-nic/how-tax-collected/self-assessment-and-tax-returns/amending-tax-return
https://www.gov.uk/self-assessment-tax-returns/corrections
I am not sure you can amend it to change to the accruals basis of accounting, but if you do, there will be transitional adjustments.
Look at SA103S and you can see box 33, so you can look at what you filed and find the equivalent. Class 4 NIC also needs consideration.
https://www.gov.uk/government/publications/self-assessment-self-employment-short-sa103s
I suspect you would be wise to seek advice.

Thank you Jeremy, it will let me change the cash basis option from yes to no, but I suspect that prior to submission it changes the following sections?

It would be helpful to have this taken into account this year to reduce my payment in January, rather than next year.

This seems needlessly complicated, perhaps why they are changing it for next year so that you can do it on the cash basis method.

Jeremy535897

You will have to adjust for any opening debtors and creditors, unless it is your first year of trading (I appreciate from what you say that it may well be your first year). Any assets you expensed will be treated as capital and you will need to claim capital allowances. Any debtors and creditors at the year end will need adjusting for. Then you set the revised loss against the profit (there are other, more complex, options that might be better, but probably not worth the bother for £5,000). You also need to enter the loss where it says adjustments to class 4 NIC, or you will pay class 4 NIC on the £30,000 profit without relief for the loss. Don't treat it as a minus.