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Tax Credit - Can you offset loss

I have employment income in 08/09 of £7500

I have made a Tax Loss in my sole trader business for 08/09 of £3,500

For Tax Credit purpose can this loss be offset against the Employment income?

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Yes. Only show the net figure after set off as employment income on the tax credit annual declaration form. I always add a hand written note on the form showing where the figure comes from.

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Yup
It not only can be offset - it *must* be offset.

Have a look here
http://www.hmrc.gov.uk/forms/tc825.pdf

Not to be confused with the options for offsetting loss for IT purposes (which will normally include this possibility but there may be other options), or the options for offseting loss for Class 4 NIC purposes (different yet again).

Wonderful how you can build in complexity to the most simple of situations.

With kind regards

Clint Westwood

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