News
How to maximise tax relief on losses to offset higher employment costs
14 May 2025
The recent rise in employers’ National Insurance Contributions (NICs) to 15 per cent will lead to a 60 per cent increase in NIC costs for a business employing minimum wage staff, according to the Centre for Policy Studies.
With no new business reliefs announced in the Spring Statement and prices continuing to rise, many businesses could face growing losses.
In a period of economic uncertainty, it is essential to make the most of the tax reliefs available on your losses.
Trading loss
If your business makes a loss from trading, the disposal of a capital asset, or on property income, then you may be able to claim relief from Corporation Tax by offsetting your loss against income from the same tax year.
You can also offset losses against capital gains you have made in the same tax year.
This may only be done after you have offset losses against your income first.
If you make a trading loss and it cannot be used in the same year, you may be able to carry it back to earlier accounting periods.
Losses on qualifying shareholdings
If you have shares in an eligible business that has failed, you may be able to offset losses against your income.
This means you could receive tax relief of up to 45 per cent on your loss.
However, you need to make sure that your loss meets the strict conditions required by HM Revenue & Customs (HMRC), as not all losses are eligible for tax relief.
Business closure
No one wants to be forced to close their business.
Unfortunately, higher employment costs may mean that some businesses are simply unable to continue.
If you make a loss in your final 12 months of trading, you can also offset this against your profits from the previous three tax years to reduce your liabilities.
Mitigate your losses with our tax team.
Business owners need to make the most of the tax reliefs available to them, including those related to losses.
Our tax advisors can help you claim tax relief on losses and recover much-needed funds.
Need help claiming tax relief on losses? Contact our tax specialists today.
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