Week 4 - Self-employment

Question 1

What if trading profits/losses run short of a year

Answer 1

You take previous years profit/loss x needed months/months in a year (12)

Question 2

What do you do with overlap relief

Answer 2

Add it to the terminal loss calculation

Question 3

What is the start and end of tax period

Answer 3

Start - 6 April (6.4.?)

End - 5 April (5.4.?)

Question 3

Types of relief for trading losses

Answer 3

1. Carry forward trade loss relief
2. Trade loss relief against total income
3. Early trade losses relief (ITA 2007)
4. Terminal trade loss relief

Question 5

Carry forward trade loss relief

Answer 5

Losses can be carried forward to future tax year and set against profits of same trade

Question 6

Types of terminal loss reliefs

Answer 6

• Later year first

- Early year first

Question 8

Early trade loss relief (ITA 2007)

Answer 8

Losses in first 4 years can be carried back and set against total income for previous 3 tax years (starting with earliest)

Question 9

Terminal trade loss relief

Answer 9

Losses in the last 12 months of trading can be set against profits of the same year and previous 3 years

Question 10

Trade loss relief against total income

Answer 10

Loss set against traders total income for current or previous year