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Posted Fri, 13 Jan 2023 08:33:22 GMT by peter whitcroft
Hi. During my last tax year before last, 2019-2020, I made a rather large loss.... This last tax year, I made a small profit. Two questions: 1) Am I right that any loss carried forward must be used up in one single tax year? i.e. i cant bring forward part of my previous tax loss this year, and part next year, and part the year after that? 2) If that answer to above is 'no I can't use partial losses to off-set multiple tax years'... Then my question is, can I choose what tax year to bring those losses forward for? i.e. if I haven't made much this year but I anticipate making more next year, could I leave those losses off my return this year and then claim them next year? Many thanks for any info as I quite need to get this right!
Posted Tue, 17 Jan 2023 11:45:37 GMT by HMRC Admin 32

You need to use the losses in the first year that you make a profit and any balance must be set off in the next tax year in which a profit arises. You must use the losses withn 4 years from the end of the year in which they arise.

Thank you.
Posted Thu, 19 Jan 2023 11:14:09 GMT by peter whitcroft
Thank you. Do I need to claim those losses even if my profit means I have zero income tax to pay? E.g. Let's say I lost 11,000 and then the next year I made a profit of £8,000, meaning no income tax to pay. Does that mean £8,000 of my £11,000 loss will be wiped away with no financial benefit whatsoever? Thank you!
Posted Mon, 23 Jan 2023 15:43:50 GMT by HMRC Admin 5

Please note that you can find a clear and comprehensive guide to all aspects of self-employed losses in HMRC helpsheet HS227:

HS227 Losses (2020)

Thank you.

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