A loss is painful, but it can generate a valuable tax refund if used correctly. We relieve your loss against other income or earlier years, often producing a repayment, so a bad year at least helps your tax.
Self-Employment Losses
If your self-employed business makes a loss, you have options: set it against your other income in the same or previous year, which can produce a tax refund; carry it back against earlier profits; or carry it forward against future profits of the same trade. In the early years of a business there are also special rules allowing losses to be carried back three years. Choosing the right relief can turn a loss into real cash.
Your Tax Help Accountants works out the most valuable way to use your loss, sideways against other income, back against earlier years for a refund, or forward, given your whole tax position, and claims it correctly on your return. A difficult year is at least softened by the tax relief we recover.
In the first years of a business, losses can be carried back three years against other income, often producing a welcome refund of tax paid while you were employed. Using losses in the most valuable way is easy to get wrong, and easy to leave unclaimed.
The Detail That Matters
A trading loss is painful, but used correctly it can generate a valuable tax refund. You can set it against other income, carry it back to earlier profits, or carry it forward, and choosing the most valuable option can turn a bad year into real cash.
You can set a trading loss against your other income in the same or previous tax year, which can produce an immediate tax refund rather than just carrying the loss forward against uncertain future profits.
In the first four years of a new business, losses can be carried back three years against your other income, often recovering tax you paid while previously employed, a welcome refund during a tough start-up phase.
Where carrying forward is best, the loss is set against future profits of the same trade, indefinitely, so it is not wasted. Terminal losses on ceasing can also be carried back.
The best option depends on your whole tax position and rates in each year. We model the alternatives and claim the relief that recovers the most, correctly on your return.
Losses are too often just carried forward by default, when setting them against other income or carrying them back would have produced an immediate refund, real money left unclaimed.
Key Figures
How We Help
We set your loss against your other income in the same or previous year, which can generate a tax refund rather than just carrying forward.
Losses can often be carried back against earlier profits or, in early years, three years, recovering tax already paid as a refund.
Where carrying forward is best, we set the loss against future profits of the same trade so it is not wasted.
All the forms, calculations and correspondence handled on your behalf, so you never have to decode HMRC's rules or sit on hold.
A clear fixed fee quoted after a free call, your position explained in plain English, and never a surprise bill.
We act quickly, and where earlier years are involved we put those right too, reclaiming refunds or minimising penalties.
Losses are often simply carried forward by default, when setting them against other income or carrying them back would produce an immediate refund. Choosing the most valuable relief is where the money is, and we make that choice for you.
Recent Client Outcome
A client whose new business made a loss in its first year assumed the loss simply carried forward against uncertain future profits.
What we did. We set the loss against the employment income they had earned before going self-employed, using the early-year carry-back rules.
The outcome. The carry-back produced a refund of tax already paid during their employment, giving them welcome cash during a difficult start-up year.
Choosing the most valuable relief, rather than defaulting to carry-forward, turned the loss into an immediate refund.
Why People Come to Us
Questions Answered
Want us to handle this for you, end to end?
See our Self-Assessment Accountant →Free fifteen-minute call. Fixed quote within twenty-four hours. Your return filed, every expense claimed, your bill explained, and salon VAT, payroll and accounts handled if you own a salon. Same accountant, start to finish.
Or email info@yourtaxhelp.co.uk, we typically respond within two business hours.
📅 Free consultation calls available weekdays 1pm to 3pm and 7pm to 8pm. Pick a slot that suits you.