{"id":575,"date":"2018-09-10T00:00:00","date_gmt":"2018-09-10T00:00:00","guid":{"rendered":"http:\/\/taxbak.co.uk\/index.php\/2018\/09\/10\/what-is-side-ways-loss-relief\/"},"modified":"2018-09-10T00:00:00","modified_gmt":"2018-09-10T00:00:00","slug":"what-is-side-ways-loss-relief","status":"publish","type":"post","link":"http:\/\/taxbak.co.uk\/index.php\/2018\/09\/10\/what-is-side-ways-loss-relief\/","title":{"rendered":"What is side-ways loss relief?"},"content":{"rendered":"<p>If a business owner makes a loss as a self-employed person, they can set off the losses against any other earnings of the same year. In effect, the business losses are moved side-ways against other earnings.<\/p>\n<p>However, in order for loss relief to be allowed, the loss making business must be able to demonstrate that it was managed on a commercial basis and with a view to making profits.<\/p>\n<p>Many cases have come to the courts when HMRC has not been satisfied that a business venture does demonstrate commerciality, and accordingly, losses have not been allowed as a set off against other earnings.<\/p>\n<p>In a recent case, Beacon v HMRC, Beacon purchased a property in Tuscany. In the first two years of active trading the taxpayer made losses amounting to &pound;218,967 and &pound;139,936. These losses were claimed in Beacon&rsquo;s tax return against their other earnings in the relevant years.<\/p>\n<p>HMRC disputed the loss relief claims on the basis that the letting business was not run on a commercial basis and the matter was taken to the First Tier Tribunal.<\/p>\n<p>The court disagreed with HMRC. They pointed to a number of factors that suggested a commercial basis, including:<\/p>\n<ul>\n<li>The property refurbishment had been financed by bank loans and these were backed up by detailed business plans and projections.<\/li>\n<li>The fact that the business was blown off-course was due in part to the financial crisis of 2008.<\/li>\n<\/ul>\n<p>The court were also critical of HMRC&rsquo;s evidence on several other fronts that suggested a lack of commerciality.<\/p>\n<p>The loss relief claims were therefore allowed as claimed.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>If a business owner makes a loss as a self-employed person, they can set off the losses against any other earnings of the same year. In effect, the business losses are moved side-ways against other earnings. However, in order for loss relief to be allowed, the loss making business must be able to demonstrate that [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-575","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-left-layout","blog-style-postblock","","blog-alt-odd"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=575"}],"version-history":[{"count":0,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/575\/revisions"}],"wp:attachment":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=575"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}