Loss carry back for furnished holiday lettings

The PBR introduced a new loss carry back rule that applies for accounting periods ending between 24 November 2008 and 23 November 2009 (for companies) and in tax year 2008/2009 (for unincorporated businesses). As well as the existing 1 year carry back of tax losses there is also a £50,000 carry back for up to 3 years. This applies to:

Companies, and

Unincorporated businesses (eg sole traders/partnerships) that are carrying on a trade. The good news is that this includes furnished holiday lettings (as this is deemed to be a trade for tax purposes) How will it work? There is still an unlimited loss carry back for up to 1 year, but losses carried back to years 2 and 3 would be capped at £50,000. This will give anyone running a furnished holiday lettings business added flexibility in the offset of losses and potentially generate additional repayments of income tax.