Carrying forward losses over multiple years: a bug in the self-assessment form?

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Carrying forward losses over multiple years: a bug in the self-assessment form?

    In 2017/18, I made £17,337 profit on my property rentals. However, I had a £40,017 loss from previous tax years to carry over, which should both wipe out my profit for 2017/18 and leave me with a £22,680 remaining loss to carry forward to 2018/19.

    I put this into my self-assessment form, and the website came up with the attached screenshot, which all looks exactly how it should be. Happy days, I thought!

    However, when I clicked "next" I got the following error message: 'Loss brought forward used against this year's profits' must not exceed 'Adjusted profit for the year'. Please amend.

    Aaargh! I then clicked on the help icon next to the "Loss brought forward used against this year's profit" box and it came up with the following (I've put the key sentence in blue text):

    Loss brought forward used against this year’s profit
    Enter any loss brought forward from earlier years up to the amount in ‘Adjusted profit for the year’ .Include any amount brought forward that you're now setting against 2017 to 2018 Income from Property profits. This figure must not exceed the 'Adjusted profit for the year' figure. If your loss is higher than your profit, provide the remaining losses available to carry forward in the 'Loss to carry forward to following year, including unused losses brought forward’.
    That sounds all well and good, but as you can see from the attached screen shot the "Loss to carry forward to following year, including unused losses brought forward" box is not one which permits numbers to be inputted by the user, but is instead (quite sensibly) one which the HMRC website calculates for you based on your previous answers in that section. Aaargh, aargh, aargh!

    Am I missing something obvious, or is this a bug in the HMRC website?

    #2
    PS: there is an obvious (although untidy) away around this problem, I realise, which is simply to put £17,337 in the "Loss brought forward used against this year's profit" box, and then I can simply remember to put the £22,680 further carried over loss on my 2018/19 return. However, my worry is that this would look odd to HMRC if they cross-reference the two years' returns.

    Comment


      #3
      Hi James, I have the same issue and I wrote to HMRC and they said that if I had loses from previous years to carry forward then I would have to keep track of them myself. I share your concern about the 2017/18 return showing no loss to carry forward because it auto calculates and then actually entering a value for the 2018/19 return. I don't think that they have given much thought to this TBH and everything is based around the new system of adding the profit on to any of your other earned income and then giving you the 20% tax credit for the finance costs at the end. It also means that any losses from previous years will be quickly used up. There are some examples on HMRC's website and it clearly says that the tax credit should not result in a tax refund. It states that the tax credit will be the lowest value of either the profit, the finance costs or the total income. Hence, if you have zero profit then you will have zero tax credit. If I understand the example correctly it means that we will be able to carry forward the unused finance cost until we eventually go into profit.

      See example 4 in this link

      https://www.gov.uk/guidance/changes-...g-case-studies

      Comment


        #4
        Thank you for the reply; I'm glad I'm not the only one. I will just go for that option, as it does seem that it will work.

        Comment


          #5
          I have the same issue and it seems really silly that they have removed the losses brought forward box especially as there is a loss carry forward box.

          Comment


            #6
            Better to submit a paper tax return showing the loss carried forward to next year and keep a photocopy.

            Comment


              #7
              Originally posted by Sandi View Post
              I have the same issue and it seems really silly that they have removed the losses brought forward box especially as there is a loss carry forward box.
              thank you, it reassures me to know I'm not the only one

              Comment


                #8
                Apologies for resurrecting this thread but I have encountered a similar issue and would really appreciate some help....

                2016/17 loss £15000

                2017/18 loss £5000

                What do I need to do to get the system to accept a total of £20000 to be carried forward to 2018/19?


                Many thanks,


                Banzai

                Comment


                  #9
                  Originally posted by Banzai View Post

                  What do I need to do to get the system to accept a total of £20000 to be carried forward to 2018/19?
                  An accountant.

                  Comment


                    #10
                    Originally posted by JK0 View Post

                    An accountant.
                    Not necessarily: I stopped using my accountant when he was about to submit my return WITHOUT carrying the loss forward.
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      Originally posted by theartfullodger View Post

                      Not necessarily: I stopped using my accountant when he was about to submit my return WITHOUT carrying the loss forward.
                      Artful - how did you submit your SA return with the loss carried forward?


                      Regards,


                      Banzai

                      Comment


                        #12
                        It was in the old days (2004-ish?) of paper returns. I corrected by accountants mistake that he had charged for, had him re-submit, sorted.
                        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                        Comment


                          #13
                          Originally posted by theartfullodger View Post
                          It was in the old days (2004-ish?) of paper returns. I corrected by accountants mistake that he had charged for, had him re-submit, sorted.
                          Thanks for the reply, still searching for a solution to what should be a straightforward occurrence...

                          Comment


                            #14
                            You can't do the return online at the moment.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              I have just spoken to HMRC on the phone.

                              There is a system issue if you try to carry forwards a previous loss when you are also declaring a loss for the current year's return.

                              The HMRC operator consulted a technician colleague and the following is the solution offered:

                              1) Leave the box "Loss brought forward used against this year's profits" blank.

                              2) Click "Save and Continue"

                              3) Add comments in the box to explain the previous loss, the current loss and the total loss to be carried over to 2018/19.

                              I also made mention that the additional text was agreed during a phone call to HMRC and added today's date.


                              I hope this helps.


                              Banzai

                              Comment

                              Latest Activity

                              Collapse

                              • Confused over multiple dwellings relief!
                                fandango
                                Hello all

                                I'm interested in buying a single block of self-contained units/flats (i.e. own kitchen and bathroom, no shared amenities or rooms). However if I am buying the lot on one single freehold title, would multiple dwellings relief still apply for the stamp duty?

                                Thank...
                                21-02-2019, 22:04 PM
                              • Adding wife to BTL property
                                ringzer
                                In 2005 I bought a BTL property in London with an outstanding mortgage of ~£150,000 and a current market value of ~ £500,000. The apartment has never been lived in by me and my name alone is on the title deeds and mortgage.

                                I would like to add my wife to the property, either 1) title...
                                18-02-2019, 17:37 PM
                              • Reply to Adding wife to BTL property
                                Kape65
                                Okay I can see the image now, however that is just asking how ownership is changing, it doesn't say they will allow it!
                                20-02-2019, 17:23 PM
                              • Reply to Adding wife to BTL property
                                Kape65
                                I don't seem to be able to view the image re option 1. I'm keen to know if it is possible to split ownership with wife without adding her to the mortgage.
                                20-02-2019, 17:19 PM
                              • Reply to Adding wife to BTL property
                                jpkeates
                                Option 2
                                If your wife isn't on the mortgage, the transfer is a gift and there's no consideration and no SDLT.
                                The gain from the point of transfer would be split.

                                If there's no saving of income tax, there's no saving other than the CGT allowance (assuming there aren't any changes...
                                20-02-2019, 12:24 PM
                              • Reply to Adding wife to BTL property
                                Kape65
                                You're right, I remember that post. I agree that it's possible to do it but I feel if HMRC did take the time to view it then it could be classed as fraudulent, evading stamp duty and income tax.
                                19-02-2019, 17:00 PM
                              • Reply to Adding wife to BTL property
                                jpkeates
                                Beneficial ownership is a can of worms and HMRC aren't in any position to dispute what a married couple assert to be how they want to split the beneficial ownership, regardless of title.

                                Someone posted on here a while back, and I made pretty much the same point (which was that the deed...
                                19-02-2019, 16:35 PM
                              • Reply to Adding wife to BTL property
                                Kape65
                                I always believed that a DOT was used because normal ownership of tenant in common property was automatically registered as 50/50 split when the true ownership may have been different i.e wife has put more money in or such. Surely to transfer a percentage to your wife and then use a DOT to claim that...
                                19-02-2019, 15:24 PM
                              • Reply to Adding wife to BTL property
                                jpkeates
                                Where property is owned as tenancy in common, the default presumption is that each tenant owns the property in equal proportions.
                                But that doesn't have to be the case, the ownership can be shared in specified proportions, so 1% and 99%, or 60%:40% are possible.

                                That split would normally...
                                19-02-2019, 13:51 PM
                              • Reply to Adding wife to BTL property
                                Gordon999
                                I think the solicitor may arrange a sale contract of 25% share in property from H ( seller ) to W ( Buyer ) at Nil price . but the Tax Office will say the consideration is 25% of mortgage loan for calculation the sdlt to pay.

                                After the property is registered under the names of H&W (...
                                19-02-2019, 13:30 PM
                              Working...
                              X