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Hi
on the example of page 49 of the study guide, I do not understand where the relief for the £20,000 trading profit in 2015/2016 comes from.
If you could help me by explaining this, I would be grateful.
Thank you.
If you look back at the note relating to this you will see that when a claim is made against the total income of the preceding tax year that there is NO restriction of the use of the loss against trading income – so whatever figure either more or less than 50,000 there is no cap that applies to it.
The 50,000 cap ONLY applies when setting off the loss against other income – in this case the employment income. Hence the available claim is made up of all the trading income of 20,000 plus 50,000 (capped) of the employment income.
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