Unrepresented taxpayers frequently miss out on an additional valuable relief, which is the availability of a three-year carry-back for losses incurred in the opening years of a trade.
Example:
John was previously employed on a salary of £50,000 per annum, and makes a loss in his first year of trading of £20,000.
He anticipates making a profit the following year of £10,000.
John can elect to carry this loss back three years and hence obtain tax relief on this loss both earlier and at a higher rate than would otherwise be achieved.
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