Trading Losses / 2 posts found
Planning for early losses
If you are setting up a new business, you may discover that establishing a profitable base takes time. If your pre-trading planning discloses an initial loss making period, you may want to take advice about the business structure you adopt. For example, if you set up the business as a company, the early year’s losses can only be carried forwards to set off against future profits. Alternatively, if you set up the business as a sole trader (or certain partnerships) there is a possibility of setting the initial trading losses against your other earnings. In this way you [...]
March 2010 – Q and A’s
Offsetting Losses from a Sole-trader Business Q: I started my own business last year, and due to some significant initial start up costs I made a substantial loss in my first period of trading? Can I claim relief for these losses, and receive a tax refund? A: You have a number of options with regard to claiming relief for your losses, and the amount of tax refunded will depend on the rate of tax you paid in previous years. You can offset the loss against the income you earned in the current or previous tax years. The options available are [...]