Offset of brought forward Furnished Holiday let losses

Offset of brought forward Furnished Holiday let...

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I use Sage sorftware for personal tax returns. My client has a large brought forward loss in 2011/12 from an unrelieved FHL loss in 2010/11. The Sage software is letting me offset the brought forward loss against other income. Surely this is not correct as the rules have now changed?

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By The Doctor
26th May 2012 19:15

You're correct
Sage is wrong Louise - I should give them a ring and tell them, they might know about I already, but if not, you might save someone else some misery.

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By DMGbus
27th May 2012 11:55

Sage tax software is not good with losses

A colleague queried the resulting tax liability on a personal tax return last week with me.

Turned out that the tax liability per Sage was about £200 higher than it should have been.

Turned out that losses brought forward had not been used at all - just "forgotten about" by the Sage Personal Tax software, or rather carried forward despite the existence of profits in the current year (on a trade).

The moral of the story is, as always with Sage tax and accounts software, "don't trust the result given by Sage" ... "always check it independently" (eg. do an Excel tax liability computation relying upon personal knowledge of tax laws as Sage sometimes overlooks tax laws in it's computations of profits liable to tax).

What I do NOT know is if other tax packages suffer from a similar flaw.  What I can say is that, for Sage, this is NOT a new defect, but one which I've been familiar with for several years, and NO I've not told Sage as it's not my job to help a highly profitable software company develop it's software for free.

There is a misconception in some circles that you can use unskilled or semi-skilled labour to input data into a tax or accounting package and miraculously the correct results is always to be obtained - absolutely wrong with Sage.   Some "big national accounting practice robot" even criticised me for doing an Excel Corporation Tax computation recently to check the Sage CT result ("why waste your time").  I was proved correct to do this as Sage CT due to its horrendous interface with several unintuitive data input points on different sheets came up with an incorrect CT liability.  Now, if I was a robot doing nothing but Sage CT computations (and aware of the silly hidden routines) it might have come up with the correct results.

 

 

 

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Chris M
By mr. mischief
27th May 2012 15:32

Totally agree

Agreed.  I use taxcalc but still have things in an Excel file.  Most of the time where there is a difference it's my model that's got a glitch.  But there are some things you still need excel for - for example overlap relief and how to adjust taxable profits in the openeing years of an unincorporated trader not with a 31 March / 5 April year-end.

 

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