Reducing Company’s Tax Bill Using Personal Losses

If you made a loss personally in an effort to make more cash and if you find it impossible to even file a claim for a tax deduction, what are the alternatives that are left for you? There’s a chance that your company claim the tax relief instead?

If a business makes a loss, HMRC will allow you to deduct it from your other income and so reduce your tax bill. At first sight the rules seem very generous, allowing carry forward, carry loss relief. But HMRC applies lots of conditions to these. One is that if your business ceases and you haven’t been able to get tax relief for all your losses, he won’t let you carry them forward to another business. But there’s an exemption for this as well.

Before forming a company, you may have commenced trading activities as a sole trader or partnership. If you have formed a company at a latter stage but were left with some losses from the “old business” you couldn’t get tax relief for. But actually, as the company is carrying on the original trade, there’s a provision that allows you to transfer the loss from the unincorporated business against income you take from the company.

For more on how to carry forward the losses and claim, tax deductions, contact an accountant or an experienced tax consultant. KVS Accountants acts as tax consultants in Richmond, Kensington, Notting Hill, Balham, Clapham, Clapham Common, Shepherd’s Bush and Holland Park.

 

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