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Posted Tue, 19 Jan 2021 14:13:36 GMT by GGPlaster
Hi During the 2019/2020 self assessment period I have ended up with a loss of £4k as my outgoings were more than my incomings (mainly due to the purchase of a vehicle for the company). This is the first time I have recorded a loss and don't know what happens in terms of: a) will I be entitled to a rebate of tax I have paid for previous years or does it just mean I won't pay any tax for this period? b) as I won't have used any personal allowance for this year is that carried forward or do I just lose my personal allowance for 2019/2020? c) I have a payment on account for this tax year where I have had a loss, do I just get this back? d) finally, does the loss carry forward to the next tax year eg. for the period 2020/2021 would I carry this £4k loss forward to take off my tax bill for 2020/2021? Thanks
Posted Tue, 26 Jan 2021 13:46:59 GMT by HMRC Admin 2
Hi,

a) If you use the cash basis form of accounting you can only carry forward the loss to set against the future years profit, but if using traditional accounting you can carry back the loss. See HS227 for full details:

HS227 Losses (2020)

b) The personal allowance is only for the tax year involved, it cannot be used in any other year.

c) If you have put your bank details on your return any credit in your statement will be paid to this.

d) If you carry the loss forward it will reduce your 20/21 profit by the amount of the loss carried forward and reduce any tax due.

Thank you.

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