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Article Index
Tax and NI
Different Taxes
Are You Self-employed?
Tax for the Self-employed
Income Tax
Corporation Tax
Capital Allowances
Offsetting Losses
Tax and Employees
National Insurance
Capital Gains Tax
Investments and Tax
Paying Less Tax
The 2012/13 Tax Year

Tax and NI

8. Offsetting Losses

8.1 If you are self-employed, you can offset trading losses against other income received in that tax year or the preceding year, such as earnings from a job or income from investments, plus any capital gains arising in that year.

  • Alternatively, losses can be carried forward to offset against future profits from the same trade.Losses in the first four years, or in the last year, may also be carried back up to three years.

8.2 Limited companies can also offset their trading losses against other income in the accounting period.

  • Losses incurred in the initial accounting period of a new company can be carried forward to reduce future tax bills, or 
carried back for one year to reclaim tax already paid.
  • Losses can also be carried back for three years when a business is closed down.
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Labels: Tax