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Readers' forum : Early year losses

09 January 2018
Issue: 4630 / Categories: Forum & Feedback

Can a part-time trader claim full sideways loss relief?

A new client made losses in her first year in business. My initial thought was to make an early year loss claim. However she does not work full time in the business and this concerns me. On further questioning the client has told me that on average she works directly with clients for eight hours each week. She spends a further three hours a week on related activities such as business development or administration. This has made me wonder whether she would meet HMRC’s definition of a commercial business so that the loss claim is not restricted.

I have been looking at HMRC’s helpsheet  HS227: Losses. This says: ‘The amount of loss relief you claim against income or capital gains may be restricted or limited for example if you … worked for less than ten hours a week on average on commercial activities of...

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