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Is loss transferable in a sole proprietor and do you have to enter the loss from the previous financial year into your accounts for this financial year yourself, or does this happen automatically?
Is loss transferable in a sole proprietor and do you have to enter the loss from the previous financial year into your accounts for this financial year yourself, or does this happen automatically?
Um, normally you won't carry forward that loss. It will be included in your personal income tax and then offset against your other income, such as your salary as an employee. So a loss in your sole proprietor -> deduction from your gross salary as an employee and therefore less taxes to pay in total. Incidentally, this happens automatically when you fill in your personal income tax return and enter the loss from your sole proprietor. I think carrying forward losses is mainly for companies, isn't it?
You really should try it out for yourself. Even if you don’t have a company number yet, you can already go ahead.