Section 128 | Employment loss relief against general income

(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.^F1

(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).