{"id":261,"date":"2026-10-05T16:06:28","date_gmt":"2026-10-05T16:06:28","guid":{"rendered":"https:\/\/ashfield-accountancy.co.uk\/?p=261"},"modified":"2026-10-05T16:06:28","modified_gmt":"2026-10-05T16:06:28","slug":"when-can-a-trading-loss-generate-a-tax-refund","status":"publish","type":"post","link":"https:\/\/ashfield-accountancy.co.uk\/?p=261","title":{"rendered":"When can a trading loss generate a tax refund"},"content":{"rendered":"<div>\n<p>Making a trading loss whilst not ideal can sometimes generate a tax refund. If you are a self-employed individual or a member of a trading partnerships, a trading loss can potentially be set against other income or capital gains. This can reduce the amount of tax payable and, where tax has already been paid, may result in a refund.<\/p>\n<p>For the 2025-26 tax year that ended in April, a loss can generally be set against income for the same year or the previous tax year. This means a business that made a profit in an earlier year but has subsequently made a loss may be able to recover some of the tax previously paid.<\/p>\n<p>There are restrictions. For example, the trade must generally be carried on commercially and for profit, rather than as a hobby. Other restrictions can apply depending on the circumstances, including where the individual works fewer than 10 hours a week on the commercial activities of the trade.<\/p>\n<p>There is also a limit on the amount of certain Income Tax reliefs that can be claimed against total income. The limit is generally the higher of \u00a350,000 or 25% of adjusted total income.<\/p>\n<p>A loss can also usually be carried forward and used against future profits from the same trade.<\/p>\n<p>If you have a trading loss, it may provide an opportunity to reduce an earlier tax bill, generate a refund or reduce tax on future profits. The rules can be complex, and we are happy to help advice you on the best way forward.\u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Making a trading loss whilst not ideal can sometimes generate a tax refund. If you are a self-employed individual or a member of a trading partnerships, a trading loss can potentially be set against other income or capital gains. This can reduce the amount of tax payable and, where tax has already been paid, may [&#8230;]\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-261","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=261"}],"version-history":[{"count":0,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/261\/revisions"}],"wp:attachment":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}