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Where Taxpayers and Advisers Meet

Trading Losses

adamsa101
Posts:2
Joined:Sun Jun 18, 2017 5:54 pm
Trading Losses

Postby adamsa101 » Sun Jun 18, 2017 6:04 pm

Hi,

I am trying to help a self employed sole trader friend of mine complete his 2016/17 tax return. In 2015/16 he completed the tax return himself. He had roughly £8,000 employment income and then made a trading loss of £2,300.00.

First off, what relief is available for there loss? Can it only be used against losses in the same trade and as such should be carried forward? Can it be used against any income? If so can it be carried back or does it have to be used in the current year where it is wasted as the £8,000 was covered by his personal allowance?

If some form of relief is available, he didn't accurately state this on his return. He didn't declare how the loss was to be used in boxes 33-35 on his return. Does this inaccuracy need to be brought up to HMRC? If I can carry back how do I inform HMRC if I can carry forward would it raise issues with HMRC if this was carried forward without pointing out the 2015/16 error?

Thanks,

Adam

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