New provisions for losses on non-active trades

The Budget brought changes the treatment of certain trading losses. Before the Budget changes trading losses could be offset against other income as well as capital gains in certain circumstances. This meant that someone could undertake an activity should as share trading, sustain a loss and offset that against employment income. The new provisions though restrict losses to £25,000 (or nil if there are tax avoidance arrangements) where there is a 'non active' trade. A non active trader is defined where there is on average less than 10 hours per week spent on it. This may therefore hit small time' sporadic' trades such as share traders carrying on the trade as well as an employment.