Self-employed losses

At the time you could have set the loss against other income of the same or the previous year. It's too late now.

You could have set the loss against capital gains of the same year. It's too late now.

You could have set the loss against earlier years. It's too late now.

You carried forward the loss which is correct.

You should have set the loss against the first available profits.

I don't suppose there should have been any losses to carry forward. If there were you could amend your tax return.

My income was below the tax threshold that year - so surely doing so would have made no difference, since I paid no tax anyway?

Neither of these applied.

But surely if I'd done so it would have made no difference, therefore making the whole exercise pointless? I paid no tax anyway that year as all my income was below the tax threshold.

I'm not sure you're understanding.

09/10 - all income below threshold, no tax to pay - £201 loss still carried forward

Am I misunderstanding something?

Reece

Write to the tax office explaining the situation. You might be surprised with a cheque in the post.

(I once misdeclared a capital gain as ordinary income, not realising that meant more tax liability. I didn't find out until 3-4 years later, but I eventually got £6K back!)

No it doesn't make the whole exercise pointless.

By using it against the first profit that you make means that you can't "save it up" for another year.

Offsetting it against profit made in a year when your income is below the tax threshold may not be to your advantage, but it is to the revenues'.

Not if Peter is right that you *must* us it against the first year that you make a profit.

Or looking at it another way, you don't generate separate "profit" and "loss" accounts each year, you generate a single "profit and loss", which is the accumulated "cash" position of the company.

yes.

tim