If I have a limited company with a financial year ending June in a given year and it makes a trading loss, which tax year(s) am I able to claim loss relief against for my earned income? If in this financial
year ending 30 June 2022 my company makes a loss, do I make the claim against the tax year ended
5 April 2022 or ending 5 April 2023?
Arthur Weller replies:
If your company makes a trading loss, you cannot claim loss relief against your personal earned income. You and your company are two separate entities. It could be that you are thinking of ITA 2007, s 64. This states: “unless a cash basis for small businesses election applies for the tax year, relief for a loss in a sole trade, or in trading partnership, may be obtained by setting off the loss against any other income of the tax year in which the loss is incurred, or of the previous tax year’.