This article is part of a series of articles on how to complete the income tax self assessment tax return for 2024/25. The deadline for submitting the return to HMRC is 31 January 2026.  

An overview of the main loss reliefs  

The first step is always to quantify, or notify, the trading loss to HMRC. This must be done on a tax return within four years from the end of the tax year in which the loss was made. Only then can the loss relief options below can be considered. 

*Net income is the person’s total income before deducting personal allowances, but after deducting certain reliefs, including: 

• pension contributions;
• qualifying loan interest payments; and
• relief claimed under the new foreign income and gains (FIG) regime. 

Interaction with class 4 NIC  

Loss reliefs for class 4 national insurance contributions (NIC) mirror the methods available for income tax relief.  

Where a loss is set against the net income of any year in which there are no other profits liable to class 4 NIC, the taxpayer will have had income tax relief, but not any class 4 relief.  

In such cases, a separate note of losses eligible for class 4 NIC relief should be kept so that class 4 NIC carry forward relief can be claimed in later tax years. This is done by a negative adjustment to box 102 on the full self-employment pages (SA103F) or, for partners, in box 27 on the SA104F. 

Restrictions on loss reliefs 

Loss reliefs cannot be restricted to preserve the personal allowance in any tax year.  

As noted in the table above, some types of loss relief are capped at the higher of: 

• £50,000; or
• 25% of the individual’s ‘adjusted total income’. 

Various other loss restriction provisions apply, including for uncommercial trades (s64, ITA 2007). For further details, see BIM85700, and also BIM85600 in relation to farming losses. Partners in a partnership are subject to additional restrictions on loss relief, see PM190000. 

Completing the tax return 

ICAEW is aware of significant delays in the processing of repayments and has raised concerns with HMRC. To help avoid delays, it is important that the following boxes in the SA110 supplementary pages to the tax return are completed where necessary: 

• Box 14. This must be completed where there is an increase in income tax/class 4 NIC for an earlier year. Typically, this will occur where an averaging claim is made. HMRC’s helpsheets HS224 and HS234 provide further details.
• Box 15. Where a loss is carried back to an earlier year, generating a repayment of income tax/class 4 NIC, it is not necessary to amend the tax return for the earlier year. Instead, the amount of the income tax/class 4 NIC repayment should be entered in box 15 of the SA110 pages for the tax year in which the loss was made. Box 15 should also be used where an averaging claim (see above) gives rise to a tax repayment.  

Your tax return software may help you calculate the amounts to enter in boxes 14 and 15 if you enter the loss figures into the earlier years (without submitting them to HMRC) and comparing the liabilities.    

Further information 

• HS227 losses