Can I Set First Year Losses Against Second Year Profits?

I started a new business last year and have only just begun to make profits after a year of losses. Can I set the losses made in the first year against the profits made in the second year?

 

Yes, you can, but if your business is run as a sole trader rather than through a company you can set the first-year losses back against your other income made in the four years before you started the business. If the business is operated through a company the use of losses is more restricted as they can only generally be set against income made by the same company in the future.

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