November 24, 2011 | By Nimbus |
Many self-employed traders have suffered losses in recent years. The effects of the banking crisis and global recession have slowed economic activity. Some of these business people will have taken on other, perhaps unrelated, part-time jobs to supplement their income?
If you have found yourself in this position be aware that HMRC may challenge your ability to set off losses. For instance:
- Losses will only be made available for sideways relief against other income when you can demonstrate that a trade is conducted on a commercial basis, with a view to making profits.
- HMRC can use present powers to restrict loss relief claims if the trader does not spend at least 10 hours a week working in the business – this restriction normally applies to losses in excess of £25,000.
If you wish to discuss any matters with us, our Nimbus Accounting expert is Paul Rawlings (01273 782 742).