Seamless Ways to Defer Your Non-commercial Losses

When it comes to handling a non-commercial business loss, you might not be able to balance it against any other income if you are in a partnership or are a sole trader. However, you can definitely defer the losses and use them in a future year if you are unable to deduct or fully eliminate them in the current year. Get help from professional bookkeeping services in Bond Street to ensure success in this aspect.

But before you attempt to do anything, continue reading to learn what these non-commercial losses are and how you can successfully postpone their effects.

What are Non-Commercial Business Losses?

If you have a business that is not deemed to be your main source of income and is serving a commercial purpose, you can encounter a non-commercial loss at any time. So, when it happens, you cannot use it to reduce your income for the year unless your business generates a good amount of profit. But you can definitely delay the effects of the losses and welcome them in future years when your business actually generates a profit.

Deferring the Losses: Ways to Consider

If you think that the current financial year has been non-profitable for your main business and that you should defer your non-commercial losses in any of the following years to handle them in a better manner, here are a few easy ways to do it:

• Deferring Losses Indefinitely

There are simply no time restrictions when it comes to deferring your non-commercial losses. You can actually postpone your losses for another year or more, but you have to make sure that one of the following conditions is properly met:

• If you incur a profit from a business activity, you can use it to offset the deferred loss.
• The commissioner decides whether to offset the loss or not.

• Reducing the Losses Using Any Net Exempt Income

If you have other tax losses, you can use any net exempt income you earned in the first year of business to reduce your non-commercial ones. Even if you don’t have other tax losses, you can still use this income to minimise the losses. But if you are unable to completely offset the reduced amount, you can defer it to a future year.

Don’t deal with non-commercial losses in the current year if your main business is not profitable. Delay the losses by one year or more and wait for the right time - the time when your business will see huge profits.

Professional bookkeeping services in Moorgate Old Street have adequate knowledge and years of expertise in this field, which they can use to help you successfully defer the losses. They are a great way to learn what to do and what not to do with your non-commercial losses and what the right time could be to deal with them.