COVID-19 - If we move from profit to loss how do we take best advantage?

A tax loss from trading can usually be offset against income, profits or gains to reduce tax or generate a tax refund.

You need to prepare financial statements and tax computations in order to claim tax relief on losses. If you made a profit last year you should be able to carry back the loss and claim a tax refund. It may take HMRC 6-8 weeks to process such a claim. If the business ceases trading, the carry back period is extended to the last three years.

If you are self employed, your business ceases trading and you begin paid employment, you may be able to get tax relief for your losses through your tax code.

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