Inland Revenue


Active member
Hello to all those who remember me - going all the way back to the City Informer days. Hope you have been successful since then. The site looks great and well done to all those involved.

Can anyone assist with any info regarding 'trading losses' ??

One or two of you may remember my disastrous deficit for the years 2001 and 2002 full time trading. Well it seemed logical to me that if trading capital had been earned as tax paid income then any losses made as a result of full time trading then these should be allowable and a tax repayment should be due from the revenue.

The first years were claimed from the revenue and duly re-paid to me. Following the second years claim an extremely diligent inspector decided to make a stand and not only dissalowed this claim but is trying to reclaim the initial repayment. He simply did not understand 'Day Trading' and thought I was broking on behalf of customers. Having made his stand and I guess not to be seen to back down I have to go to court and argue my case to the Commissioners.

Has any body else experienced this situation and can provide any assistance in this respect ???


sorry cookie
from the info you have given, I'm afraid you will lose this one.

The very best you could achieve is to have them treated as
Capital Gains losses and have them carried forward against future Capital Gains profits.

i can't offer any advise on your case with the Commissioners, but please keep us posted.

what i would say is don't give too much away on these fora. i'm a member of an association called the Professional Contractors Group. We all chipped in to take the Revenue to a Judicial Review of some tax legislation called IR35.

It is generallly acccepted that our chat fora were infiltrated by the Revenue.

best of luck

Firstly, I am surprised if you have not had a Accountant to handle your affairs. Did you advise the Revenue of your intention to set up as a Day Trader. Did you advise them where the capital employed originated. Normally on setting up a new business these are vital facts your Accountant would advise the Revenue of.

Assuming this is a County Court Summons, I would suggest you immediately write to the court asking for an adjournment, then seeking Professional advice in the form of Accountant and or Solicitor. If it is a High Court writ then you definately need the services of a Solicitor pronto.

However, in my opinion, you are right in your conclusion that losses CAN be set against profits, but losses cannot be set against any other business profits.

Do seek advice quickly, and I am sure the matter can be reconciled without a court hearing.

Your old friend and sparring partner.


Cooking having re-read your post. This sounds like a Appeal Hearing by the Commssioners of the Inland Revenue and is not a court in the accepted sense. Ask for the date to be put back and do as suggested in the above post.

Cookie :cheesy:
Long time no speak. Let us know how you get on as this is a very grey area with a lot of people guessing what the proble outcome may be. As suggested, keep specific detail close to your chest as walls have ears. Formally posting their final judgement will be a useful archive document that is definitive.
Did you stop trading after you incurred those losses ?

I have outlined the best outcome but the worst outcome is
that you will win your argument that you were trading as a
business and if you stopped trading after those losses, they will treat it as a discontinued occasional business and you will get no tax relief at all and no carry forward either.
John and Martin its good to hear you are still around. John where did you go for a long while ? Many thanks for all your input.

Firstly having owned some 12 companies both here and abroad over the past 20 years and current owner of 4 I am well used to dealing with the revenue and of course I have always employed the services of professionals. In this case I have the full support of my accountant.

A grey area this one I think especially for the revenue ( or at least for the inspector who did not seem to understand what Day Trading was )

Any trading profits are in the most part subject to tax it is therfore reasonable to expect that losses are calculated in the same way.

You may be correct 'B' a capital loss carried forward is a possibility. Is this a professional opinion or from personal experience ??

As far as the commissioners are concerned they will have to cite 'Cases' if this happens I will inform in due course.

I take it from no positive response that either you guys just dont make a loss or there have been no successes with regard to capital loss.

I am however still interested to learn from others.

Whichever way it goes it is not life threatening.

Suicide might have been an option in 2001 having had to make a 50/50 decision between Day Trading or Property Development.

The rest is history - laugh !!!!

cookie, if you dont mind me asking , how much were your trading losses?
I usually make sure I get ALL the info , because there's usually some twist you can work around. But you gave very brief details.
And that makes it dificult.
Taves have NOTHING to do with 'reasonable'.
There are specific provisions as to how losses are to be treated.

Trading profits MAY be taxable but not necessarily so.It depends
on a number of things.
And you may be dead in the water on that point alone.
If I was the Inspector, that is what I would go for.
If the profits wouldnt be taxable under D1 od D6 , then you cant
get relief for any losses.

Hope you had your accountant involved BEFORE you had your
dust up with the Inspector. (Always helps)

Best of luck. You havent given enough info for a professional opinion and anyway I dont give that for free over the internet on
a bulletin board. But hopefully I have covered a few points for

£1.25 million in shares mostly traded T+ Loss approx £80k

Bonsai many thanks for taking the trouble - will give it a go and let you know.