Tax return question...so close!

[snufflepuff]

I have finally managed to get the info I need from my ex-employer and have done my tax return, but i'm stuck on one bit.
I made a loss, and under the 'income tax losses' section, it asks for 'year for which you are claiming relief above' and when you click on the little help button it just says to enter the year in which the loss is to be relieved. What on earth does this mean? Does it mean the year that I want to loss amount to be taken off my income? Eg this year, 2010-2011, to make my profit and therefore tax bill less?

I'm so nearly done, just need help with this last bit and it will be a weight off my shoulders!

[Chimps Childminding]

Sorry, don't really know, but didn't want to read and run!! DebbieS26 is the expert on tax, hopefully she will be along at some point!! :thumbsup:

[aly]

i think its 2009-2010, but debbie will confirm,.

[Allie]

If you are unsure phone them up they really are very helpful:)


Allie

[Zoomie]

I had this two years ago.

Figures are examples:

2008-9
Employed job £ 8000, paid about £500 tax as PAYE
Childminder £1000 loss.

2009-10
Childminder £5000 profit.

Now you have two choices, you can have £8000-£1000=£7000 and you are taxed on that. As £500 tax already paid, you will get a small refund from tax office.

Or you can carry the loss forward, and use it against profits made in the next tax year, in my case 2009-10.

This is what I chose to do.

BUT when I did my 2009-10 return, I made a profit but my total income was actually below the personal tax threshold, so I had no tax to pay.

I incorrectly throught I could carry it forward further (ie loss from 2 years back), as I do finally expect to have to pay tax in this coming tax return 2010-11, but tax office confirmed you cannot jump a year. So essentially my decision to carry loss forward was a waste, BUT the tax office has allowed me to submit an application to vary my return, and I have now done this, going back to the expecting a small refund on the tax I paid in 2008-9.

So the questions to ask yourself are.

Do you expect, in this tax year, to make a lot more profit than the personal tax allowance (think is £6475 but may be slightly higher), then carry the loss forward.

If you aren't sure (and how can you be in the unpredictability of childminding) offset the loss you made against the tax you have already paid via PAYE, assuming you have of course.

If you paid no PAYE, then I would suggest you carry loss forward, and hope you make enough profit the next year to take advantage and cut your tax bill down.

Hope I have made sense.

Also phone the tax office for advise, they are really very helpful :thumbsup:

[sarah707]

I have always rung them in the past and found them to be really helpful :D

[snufflepuff]

Thank you Zoomie that was really helpful.
I made a loss of about £1000 last tax year, and definitely don't expect to make more than the tax threshold this tax year so am I right in thinking this means there is no need to carry the loss forward, as it won't benefit me because I won' be paying tax anyway? So I want to put 2009-2010 for that question?

[Zoomie]

Thank you Zoomie that was really helpful.
I made a loss of about £1000 last tax year, and definitely don't expect to make more than the tax threshold this tax year so am I right in thinking this means there is no need to carry the loss forward, as it won't benefit me because I won' be paying tax anyway? So I want to put 2009-2010 for that question?

Unfortunately I don't know the tax return form very well so not sure what boxes to ask you to tick. Box 31 rings a bell, but that is just memory from my own conversation with the tax office.

Ring them, they will help you get it right.

[Chatterbox Childcare]

the way I am understanding your post is that you are submitting a return for the last financial year which should be 2009-2010 and it is asking you for any loss to be carried forward?

If this is the case, when you lodged your return for 2008-2009 it would have shown a loss figure and this is the figure that you need to submit.

You may not have reached a taxable amount but the IR are aware of the loss so I would put it in anyway.