A. No, losses on the cash basis are carried forward to offset against profits of the same trade in later years. However, starting from the 2025/26 tax year, the cash basis will be the default method for all unincorporated businesses. New rules will allow losses to be set sideways in the same year or the previous year (subject to a cap) before carrying them forward to offset against future profits of the same trade. This change aligns the cash basis with the accruals basis regarding loss treatment.
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