Income Tax Reliefs

Question 1

what is early years loss relief?

Answer 1

It allows you to carry a loss from the first 4 years of trading back against income from the 3 years before the business started

Question 2

who qualifies for early years loss relief?

Answer 2

• sole traders
• Business must be trading commercially with the intention of making a profit

Question 3

what conditions need to be met to apply for early years loss relief?

Answer 3

• the loss must arise in any of the first 4 tax years of trading
• it must be claimed by submitting it within 12 months from 31 jan following the end of the loss making tax year

Question 4

what is the current year and carry back loss relief?

Answer 4

it lets you set the loss against total income of the same tax year or the previous tax year

Question 5

what conditions need to be met for current year and carry back loss relief?

Answer 5

• loss must be from a genuine trade
• must be claimed within 12 months of 31 jan after the end of the loss year

Question 6

What is carry-forward loss relief?

Answer 6

it lets you carry forward your trading loss and use it to reduce future profits from the same trade