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

                              • Moving into my Buy to Let
                                Veryvicky79
                                I’m considering selling my primary residence and moving into my buy to let. I then will want to sell the buy to let in a couple of years time and then buy a new primary residence outright. Reason for this is to consolidate my assets and buy my next family home outright.
                                My question is will...
                                22-04-2019, 17:23 PM
                              • Reply to Moving into my Buy to Let
                                Gordon999
                                The gain achieved during "primary residence period" is exempt for cgt. .

                                The gain achieved during the BTL period is liable to cgt at 18% or 28%

                                Primary residence can be claimed for the period in residence plus up to 9 months after moving out
                                24-04-2019, 01:39 AM
                              • Reply to Moving into my Buy to Let
                                buzzard1994
                                By taking full advantage of the tax relief for private residences and selling before they need to pay tax. You used to be able to designate whichever property you wanted as your main residence. The last 18 months of occupation is currently tax free - that is dropping to 9 months in 2020. It used to...
                                23-04-2019, 21:49 PM
                              • tax responsibility and allowable expenses
                                pineapple11
                                Hello, wondering if anyone can help.

                                Firstly, my husband and I are joint owners of our rental property but I heard that we can change things so the tax is based on my income alone. Is this true? If so how can I go about arranging this. I earn alot less than my husband.

                                Secondly,...
                                23-04-2019, 20:58 PM
                              • Reply to Moving into my Buy to Let
                                jpkeates
                                They don't actually avoid it, they do what anyone can do if they live in more than one place.
                                You can nominate one of them to HMRC as your primary residence - because you're only allowed one property as your "primary" residence.

                                While that costs you CGT on the other one,...
                                23-04-2019, 11:54 AM
                              • Reply to Moving into my Buy to Let
                                flexy
                                How do politicians get away with paying no CGT on their second residences?
                                23-04-2019, 10:04 AM
                              • Reply to Moving into my Buy to Let
                                loanarranger
                                jpkeates is correct however your lender might give consent to you occupying the property but place a bar on any release of equity from the property until either you have vacated the property again and can demonstrate this having been done or you have sold the property: much will depend on who your Buy...
                                23-04-2019, 08:53 AM
                              • Reply to Moving into my Buy to Let
                                jpkeates
                                The CGT is adjusted to allow for the period of residence (under current rules at least).

                                Do you have a mortgage on the BTL property, because that would not allow you to live their without breaking the terms of the loan?
                                23-04-2019, 08:43 AM
                              • Reply to Moving into my Buy to Let
                                theartfullodger
                                Do you know what CGT rules will be when you sell?
                                22-04-2019, 19:52 PM
                              • Reply to Moving into my Buy to Let
                                JK0
                                Yeah, for the gains for the time it was a rental.

                                You might also want to look into stamp duty.
                                22-04-2019, 19:38 PM
                              Working...
                              X