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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15914
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I need some advice on how to treat a business loss on my

Customer Question

I need some advice on how to treat a business loss on my 2015/16 short self-employment tax return form please.
This is the first year of making a loss (previous years have been profitable and tax has been paid) so I'm unsure whether to enter the total loss figure in box 34 (I have no other income for 2015/16 to set the loss against.
What would you charge for providing guidance on this point please.
Submitted: 10 months ago.
Category: Tax
Expert:  TonyTax replied 10 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Customer: replied 10 months ago.
OK. Thank you Tony
Expert:  TonyTax replied 10 months ago.

Can you tell me how much the 2015/16 loss was and how much your income for 2014/15 before personal allowances was please.

Expert:  TonyTax replied 10 months ago.

What was the start date of your business?

Customer: replied 10 months ago.
The total loss for 2015/2016 was £18,824
Total taxable profits for 2014/15 from self-employment was 28,437
Business has been running for many years - in excess of 10 years
Expert:  TonyTax replied 10 months ago.

Thanks.

You have a choice. As you have no income in 2015/16, you have the option to take the loss back to 2014/15 by putting the loss figure of £18,824 in box 34 of the SA103 (short) pags here, working out how much that would reduce your 2014/15 tax and NIC liability by and putting the reduction figure in box 15 of the SA110 pages here. It's an all or nothing claim so you will waste some of your personal allowance for 2014/15 but not much. Alternatively, put £18,824 in box 35 and carry forward the loss for use against future profits of the same business only. Based on the information provided I'd take the loss back to 2014/15.

I hope this helps but let me know if you have any further questions.

Customer: replied 10 months ago.
Hi Tony Thanks for that. May I ask two supplementary questions please:
1. Am I correct that I don't have to submit SA110 to the Revenue - it's just a form so that I know what I have to pay or receive in refunds?
2. How much would you charge to calculate the figure that needs to go in box 15 of SA110
Many thanks
Expert:  TonyTax replied 10 months ago.

1 SA110 is part of the tax return so it should go to HMRC. If you are using tax return software, it will be automatic.

2 You should have paid tax of £3,687.40 and Class 4 NIC of £1,843.29 in 2014/15. As your taxable income was £18,437 (£28,437 - £10,000) and the loss exceeds that, you should get all the tax and NIC paid back. So, put £5,530.69 in box 15 of SA110. Your tax return for 2014/15 will tell you whaht your gross tax and NIC liability was.

Customer: replied 10 months ago.
Wow - thanks very much for that Tony - you're spot on, that's exactly what I paid!! Thanks so much for explaining that and I'm massively grateful.
One final question please (and please let me know if you need to make a further charge) - should I tick the box that says I wish to pay voluntary Class 2 NI contributions?
I'm 58 and started work when I was 17 so have well over 35 years worth of NI credits (which is what I understand you need in order to qualify for the full state pension) so wasn't sure whether I needed to pay NI this year or not
Expert:  TonyTax replied 10 months ago.

Thanks.

As you made a loss in 2015/16, you shouild not need to pay Class 2 NIC which is £145.60 for the year but if you do, it will go towards your state pension. Take a look at the notes here. As you have your 35 years, you probably don't need to pay.

Customer: replied 10 months ago.
Thanks Tony. What a brilliant service you've provided - thank you, ***** *****'ll remember this for future reference.
Expert:  TonyTax replied 10 months ago.

Thanks.

Would you mind rating my answer before you leave the site please.

TonyTax and 2 other Tax Specialists are ready to help you
Customer: replied 10 months ago.
Already done with great pleasure
Expert:  TonyTax replied 10 months ago.

Thanks.

If you are posting a paper return. keep a copy and chase up the tax repayment after 5 weeks on the number here. If you submit it online, chase up the tax repayment after 4 weeks on the same nuimber.

Customer: replied 10 months ago.
Thanks again for that tip!
Expert:  TonyTax replied 10 months ago.

No problem.

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