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Accountant@Work
[email protected], Accountant
Category: Tax
Satisfied Customers: 785
Experience:  Executive Director at [email protected]
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How many years of income tax losses can you carry forward

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How many years of income tax losses can you carry forward for relief in a later year?
JA: What are the assets or property for this capital loss?
Customer: It is not a capital loss. It is trading losses for a sole trader where i have had to borrow substantial money just to cover my trading costs.
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: I don't know what else they would need to know.

Hi, welcome to JustAnswer. I'm [email protected], a UK-Qualified Chartered Certified Accountant with over 15 years of experience. I'll be answering your question today.

You can carry a loss forward indefinitely but you can only carry loss backward for up to 3 years

For accounting periods ending between 1 April 2020 and 31 March 2022, this is extended to three years, with losses required to be set against profits of most recent years first before carry back to earlier years.

https://www.gov.uk/government/publications/extended-loss-carry-back-for-businesses/extended-loss-carry-back-for-businesses#:~:text=Broadly%20speaking%2C%20the%20current%20rules,carry%20back%20to%20earlier%20years.

I hope I've answered your question? If, however, any part of my response is unclear, please do let me know and I'll try to explain it further.

[email protected] and 2 other Tax Specialists are ready to help you
Customer: replied 9 days ago.
Thank you for that. I have been carrying forward losses for a good number of years but at last, this year, I am anticipating a single large income amount which will be due within the period to April 2023. I am also expecting to launch a new ECourse over the next few months but I may well incorporate for that product to be able to protect my IP since I have invested over 40 years of experience into this product. Your confirmation that losses can be carried forward indefinitely gives me reason to expect that my Tax Return for this coming tax year will not be as punishing as it might otherwise have been. Many thanks for your assistance.
You're welcome. Happy to help
Customer: replied 9 days ago.
I have no intention of carrying back income to an earlier period since all of the earlier periods were loss-making. In general, although I have passed retirement age, I have been working on a detailed ECourse since I worked for over 40 years as a Company Doctor helping to turn around failing companies. I fully expect to be able to sell this ECourse within the next year so I have been submitting Tax Returns annually to ensure that I would be carrying forward losses created from the costs of maintaining a basic operation which was concentrating upon updating my technical knowledge whilst also keeping open the option to take on further assignments. During this period, I have also been submitting VAT Returns so that my status has been maintained. To keep these opportunities open, I have borrowed extensively so both those costs and the past annual tax losses will at least tend to offset the first year or two of significantly higher income yields. Many thanks for confirming my original thoughts regarding my ability to carry tax losses forward, such losses having been stated annually within my submissions to HMRC.
as long as these losses have been reported on your annual self assessment tax returns, you have a clear trail of losses available to set off against future profits from the same trade.
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