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Posted Sun, 07 Apr 2024 12:30:09 GMT by Anthony Bedell
Hello I started a business in June 2022 after a teaching career and because of substantial training costs made a sizeable business loss of £91 857 in 22-23. This resulted in £1 500 tax rebate on the teaching income on which I had paid PAYE. 1. In 22 - 23 I had other income of £18 617; will my loss carried forward be reduced by the whole of the 18617, ie I lose the personal allowance? 2. Where on my records can I see the amount the HMRC is carrying forward as losses? In 2023-24 I have net business income of £16191, and other income of £10 197 - largely teachers pension (no tax deducted). I have entered all this on a draft 23-24 tax return. 3. Once again, do I have to apply losses of 16191? 4. I read somewhere you could only apply 80% of losses ie .8 x 16191 = 12953. Is that right? 5. Chiefly, whenever I apply any of these figures on my 23- 24 draft return in Loss brought forward from earlier years set-off against 2023-24 profits:" it comes up with "Warning". Can you tell me what I am doing wrong please? All other entries are being accepted. I still cannot see what brought forward losses HMRC are using. Thank you Anthony Bedell
Posted Wed, 17 Apr 2024 10:46:46 GMT by HMRC Admin 32

Your losses can be carried forward to future tax years and set of against profits in that tax year. On your Self Assessment tax return, there is a box for losses carried forward. As this is a new business, you are also able to carry back the losses to a year before and set against income, provided you did not use the cash basis of accounting.  
You will need to claim this in your tax return (on SA103F box 80 or online box named "Total loss to carry forward after all other set-offs".  Have a look at the guidance on losses on helpsheet HS227.

HS227 Losses (2024)

You can set all of your losses against the net profit, if your losses are less than the net profit. A warning in the online return, is only bringing something to you attention, just so that you can review the box and ensure that it is the right box and the figures are correct. It is not an error.  
If you are happy with the entry when you receive a warning, all you need to is click on save and continue to move to the next part of your return.  
The loss carried forward from the previous tax year is shown on SA103F at box 74 or online in the box named "Loss brought forward from earlier years set off against this year’s adjusted profit".  
This is the amount of loss from the year before that you are using in this tax return.
Thank you.

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