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Are your losses available for offset against your other income?

Are your losses available for offset against your other income?

Are your losses available for offset against your other income?

The tax rules can allow you to offset losses you make in one business against your other income made in the same tax year.

However watch out…HMRC are increasingly looking at the nature of the loss making activity to make sure it is a genuine business.

For instance, in a recent Tribunal case HMRC succeeded in arguing that a horse-breeders losses were not available for offset against his other income.  Whilst accepting an initial profit motive, HMRC thought the actual lack of profits over numerous years meant it was not a commercial business & that losses could not offset against other income.

Small / hobby businesses run alongside employment or other businesses are most likely to be at risk, if in doubt seek tax advice.

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