The Tax Inspector may raise questions if you make a persistent loss and want to set that loss against your other income. Only where your trade is conducted on a commercial basis with a view to a profit can the losses be available for relief against your other income of the same or immediately preceding tax year. For periods ending after 11 March 2008 the loss relief can be restricted if you do not spend at least 10 hours on average per week working in the business. This restriction will normally only apply where your loss for the year is £25,000 or more, but it can apply to any level of loss that has been artificially created.  

CKLG ACCOUNTANTS IN CAMBRIDGE ARE HERE TO HELP, CONTACT US OR CLICK ON THE LINK BELOW.

Helpsheet for self-employed losses 2010/11