Loss relief

Loss Relief is where you tell HMRC how you want to use a business loss. From the 2026-27 tax year you complete one loss relief declaration per business per tax year, once that tax year has ended. Everything you save replaces what HMRC holds for that business and year, so each declaration carries the complete picture.

What Loss Relief is for

Loss Relief (at /tax/losses) is where you tell HMRC how you want to use a business loss. It covers your UK property business and each self-employment business you have registered with HMRC.

From the 2026-27 tax year, loss relief works as one declaration per business per tax year. You pick the business, enter the amounts that apply, and submit. The declaration can be amended or deleted later, and each save replaces what HMRC holds for that business and year.

This guide explains the boxes and the order to do things in. It does not advise on which relief applies to your situation: that is a tax-law decision, so check with HMRC or your accountant, or see /mtd-guide.

Who can use it

Loss Relief is part of filing to HMRC, so it is available on plans that include HMRC submissions. If your plan does not include filing, the page shows the subscription options instead.

You also need a connected HMRC account, because declarations are read from and written to HMRC. If you have not connected yet, see Connect your HMRC account.

Before you start

• You are signed in and connected to HMRC.
• The tax year you are declaring for has ended (after 5 April). HMRC does not accept loss relief before then.
• For a self-employment business, the business must already be registered with HMRC (it needs an HMRC business ID). Your property business is covered by your HMRC connection.
• You know the loss figures for the business: the amount brought forward from earlier years, the amount to carry forward, and any amounts to set against other income or carry back.

Choose a business and tax year

1. Open Loss Relief from the Tax & MTD menu, or go to /tax/losses. (You can also reach it from the Loss relief row on Year-End Review.)
2. Check the tax year selector at the top. It defaults to the current tax year and only offers 2026-27 onwards.
3. You see one card per business: your UK property business and each self-employment business. Click a card to open its declaration.

Note: If no cards appear, there is no HMRC-connected business on the account yet. Connect HMRC, or add the self-employment business first.

Complete the declaration

The form is split into sections. Leave a box empty if it does not apply; you must enter at least one amount before you can submit.

Losses brought forward and carried forward

• Brought-forward losses applied this year: losses from earlier years set against this year's profits of the same business.
• This year's loss carried forward: this year's loss sent forward against future profits of the same business.
• Previous years' losses carried forward: unused earlier losses that continue to roll forward.

Set against this year's other income

• Loss set against this year's other income: Section 64 relief, using this year's loss against your other income for the same year.

Carry back to earlier years (trading businesses only)

• Loss carried back to the previous year: Section 64 relief against last year's income.
• Early-years loss carried back: relief for losses in the first four years of the trade.
• Terminal loss carried back: relief when the trade has ceased. A terminal loss cannot be combined with carrying losses forward.

Note: A property business cannot carry losses back, so those boxes do not appear for it. Use the brought-forward and carry-forward boxes instead.

If you set a loss against both last year's income and this year's income, the form asks which HMRC should apply first. Pick one before submitting.

When everything is in, click Submit to HMRC. The page checks the figures first and lists anything that needs fixing, such as an amount with more than two decimal places, a negative figure, or a carry-back entry for a property business. After a successful submission the header shows Submitted for that tax year.

Tip: If you are unsure which relief to use, this is a tax decision, not a software one. Confirm with HMRC or your accountant before you submit.

Amend or delete a declaration

• To amend, open the business card again, change the figures, and click Amend at HMRC. The whole declaration is replaced, so make sure every box that still applies is filled in.
• To delete, click Delete, then confirm. This removes the declaration from HMRC for that business and tax year.

How it fits with Year-End Review

Loss Relief appears as its own row on Year-End Review under Reliefs and allowances. Submitting a declaration confirms the row automatically. Most people have no loss to claim, in which case you mark the row Not applicable and carry on. See Year-end Final Declaration for how the year-end flow fits together.

For accounting adjustments to income and expense totals, see Business adjustments (BSAS), and for annual property allowances and adjustments see Property annual finalisation.

If something goes wrong

• "Loss relief opens once the tax year ends" is showing. This is expected before 6 April following the tax year you selected. Come back once the year has ended.
• No business cards appear. There is no HMRC-connected property or self-employment business on the account yet. Finish your HMRC connection, or register the self-employment business with HMRC first.
• The page shows subscription options instead of the form. Loss relief is filing activity, so it needs a plan that includes HMRC submissions.
• The page shows a "not enrolled" state. You are not yet enrolled for Making Tax Digital with HMRC. Finish your HMRC connection and confirm your MTD enrolment, then refresh (and use Reconnect in Settings if it still shows afterwards). See Connect your HMRC account.
• Submit is blocked with a list of fixes. Work through each item: amounts must be in pounds and pence, cannot be negative, a terminal loss cannot sit alongside a carry-forward, and property businesses cannot carry back.
• The declaration would not load. HMRC may be temporarily unavailable. Use the back link to return to your businesses and try again in a few minutes.

If you are still stuck, see Getting help.

Frequently asked questions

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