Loss Relief Calculator
Calculate tax savings from carrying back, carrying forward, or claiming sideways relief on trading losses. Understand your options for offsetting business losses.
What is trading loss relief?
Trading loss relief allows businesses to offset trading losses against other income or gains to reduce tax liability. Losses can be set against profits of the same period, carried back to previous years, or carried forward to future years.
How do I carry back trading losses?
Trading losses can be carried back to the previous 12 months (or 3 years for terminal losses when ceasing trade). Corporation Tax losses can be carried back 12 months. This generates a tax refund for the earlier period.
Can I carry forward losses indefinitely?
Yes, trading losses can be carried forward indefinitely against future trading profits. However, from April 2017, companies can only offset 50% of profits above £5 million using carried forward losses.
What is sideways loss relief?
Sideways loss relief allows trading losses to be set against other income (such as employment income or rental income) in the same tax year or previous year. There are restrictions on reliefs for uncommercial trades.
What are the limits on loss relief?
Income Tax: Sideways loss relief is capped at the greater of £50,000 or 25% of adjusted total income. Corporation Tax: 50% restriction applies to profits above £5 million. Special rules apply to certain types of losses.
Carry Back
Set against previous year's profits. Get a tax refund for prior period.
Sideways Relief
Set against other income in current year. Subject to £50,000/25% cap.
Carry Forward
Set against future profits indefinitely. No time limit.
Professional Advice
Loss relief rules are complex. Consider consulting an accountant to maximise tax savings from your business losses.