Income tax losses set off against general income and incorrect return

Income tax losses set off against general...

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HI everyone,

I am facing a interesting situation in relation to the income tax loss set off against General Income for the tax year. The year is question is 2011-2012. The person who completed the tax return for the client did not claim for this relief correctly. The loss from the trade was set off PARTIALLY against the general income saving Personal Allowance. HMRC have now sent letter because client did not disclose one of the employment income. Because of this she now faces tax bill of £3k and the deadline to claim the election for trading loss set off has also passed (31st Jan 2014). 

MY question is, will HMRC allow to amend the return requesting proper claiming of whole loss against the Total General Income ? Because the loss relief was claimed on time but the return was not correct (its the case of incorrect return).

Thank you in advance.

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By chicken farmer
09th May 2014 11:05

Sorry what's the problem?

Surely a claim for loss relief was made in the 2011-12 return and therefore made on time. The fact that the self assessment may have not been correctly calculated does not detract from the fact that a claim has been made. At this point there would seem to be no loss of tax.

The failure to disclose earnings is a separate issue and when Revneue issue closure notice they should allow loss relief on the correct basis.

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