Offset small self-employed loss against employed income to increase child tax credit?

jnd

Was after some thoughts please.

Using the online tax credits "Do I Qualify" link I entered my figures for employed income and savings only and it reports than I am due £200 child tax credit from now until April. I already get paid it but at a higher amount due to them using last year's income as the basis for 2005-06.

I am self-employed on a part-time basis and have a total loss of £1800, part of which was brought forward from last year due to me only starting up. If I offset this loss the figure comes out at £285 child tax credit until April. In '05/'06 I expect to make a small profit and was going to offset the loss against it next year, but should I offset it against my income for this year instead?

Cheers.

Pinkleylandii

I would claim the 2004/05 self employed loss against your 2004/05 employment income. I see that some of the loss relates to a prior tax year, this can only be set against future profits of the same self employment trade so you will have to wait till next year's tax credit claim to claim this element of the loss.

I wonder if you are still in time to revise your 2003/04 tax credit claim, as if the loss brought forward is a 2003/04 trading loss, then there was nothing stopping you setting this against your 2003/04 employment income to increase your 2003/04 tax credit. It is worth checking with the Revenue. My 'gut' feeling is that you should be ok as the deadline for amending a 2003/04 tax return is 31 January 2006.

Cheers

John