Part 4

Loss relief
Chapter 5

Losses in an employment or office

Employment loss relief against general income
128
1
A person may make a claim for employment loss relief against general income if the person—
a
is in employment or holds an office in a tax year, and
b
makes a loss in the employment or office in the tax year (“the loss-making year”).
2
The claim is for the loss to be deducted in calculating the person's net income—
a
for the loss-making year,
b
for the previous tax year, or
c
for both tax years.
(See Step 2 of the calculation in section 23.)
3
If the claim is made in relation to both tax years, the claim must specify the year for which a deduction is to be made first.
4
Otherwise the claim must specify either the loss-making year or the previous tax year.
5
The claim must be made on or before the first anniversary of the normal self-assessment filing date for the loss-making year.
5A
No claim may be made in respect of the loss if and to the extent that it is made as a result of anything done in pursuance of arrangements the main purpose, or one of the main purposes, of which is the avoidance of tax.
6
Nothing in this section prevents a person who makes a claim specifying a particular tax year in respect of a loss from making a further claim specifying the other tax year in respect of the unused part of the loss.
7
This Chapter is subject to paragraph 2 of Schedule 1B to TMA 1970 (claims for loss relief involving two or more years).
8
This section needs to be read with section 129 (how relief works).
S. 128(5A) inserted (with effect in accordance with s. 68(2) of the amending Act) by Finance Act 2009 (c. 10), s. 68(1) (with s. 68(3))