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Relief for losses sustained in a trade, profession or vocation

B8.201 Reliefs available for trade losses—overview

An individual who sustains a loss in a trade, profession or vocation carried on by them (alone or in partnership) may claim relief by offsetting the loss against other income. For an established trade the loss can be offset against current year income, carried back for offset against income of the previous year or carried forward. The carry back relief is extended to cover a three year period if the losses are incurred in the first four years of a trade or the years of cessation.

HMRC Helpsheet HS227 gives guidance on relief for losses made in a trade, profession or vocation including a partnership. It also includes a working sheet to help taxpayers keep track of their losses.

There was also an additional temporary relief, for tax years 2020/21 and 2021/22, whereby unrelieved trading losses could be carried back and set against profits of the same trade for