Loss relief against trading profits/ total income !

The application of any loss relief will reduce the total income of the taxpayer for the relevant tax year of claim. If the amount of loss relief applied (remember partial claims are not allowed) reduces the total income below the level of the personal allowance (PA) then we are using a loss to reduce income that would not have borne tax, therefore wasting the personal allowance
If total income is 10,000 and the PA is 10,000 the taxpayer has no taxable income and no tax will be payable. If a loss relief reduces the total income to nil the taxpayer will still pay no tax, but will have used a loss the benefit of which could have been used in another tax year and will have wasted his PA for the tax year as if it is unused in a given tax year it will be lost!