Can a sole trader carry back losses to reclaim some tax paid from previous years?

Can a sole trader carry back losses to reclaim...

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Can a sole trader carry back losses to reclaim some tax paid from previous years?

A sole trader who bought a large quantity of stock 2012-13 sold a fair amount and made a good profit. However last year he was unable to sell more - faulty goods - took time to sort out. This means his will have virtually no turnover and a reason loss. This will continue into 2014-2015. He wants to know can he carry the loss back to recoup some tax paid?

I don't believe I ever came across this, just normally 'carry forward' to reduce current year. For a quick answer I thought I post here.

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Euan's picture
By Euan MacLennan
04th Aug 2014 12:34

Loss relief against current or previous year

Under s.64 ITA 2007, you can claim loss relief against total income of the current and/or previous year.  So, he can carry back any loss in 2013/14 against his profits in 2012/13, but not a loss in 2014/15, which he will only be able to carry forward against the first future profits of the same trade under s.83.

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By carnmores
04th Aug 2014 12:48

you may also wish to consider
Revising the first years accounts stock figure if in time, what's the year end

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Replying to johnhemming:
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By 401K
20th Aug 2014 20:35

I will look into that. 2014

Thanks Euan. 2014/15 is looking poor he tells me.

snickersinatwix I will look into that. 2014/15 is fourth year of trading. Cheers

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