Section 128 — Income Tax Act 2007: Employment loss relief against general income

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).