An individual was not entitled to claim trading loss relief against his general income, as the trades were not carried on on a commercial basis, and were not carried on with a view to the realisation of profits.
The appellant started a trade in 2004 of supplying ingredients and running cookery workshops (‘Silver Spice’). In 2007, he started a separate trade, selling art and photographic images of Indian culture (‘Art Sutra’). The appellant conducted both trades as a sole trader, alongside his full-time employment as a psychiatric social worker.
The First-tier Tribunal (FTT) had to consider whether the appellant was entitled to set off losses in either trade against his employment income in the tax years 2006/07 to 2009/10 (under ICTA 1988, s 380 and ITA 2007, s 64). HM Revenue and Customs (HMRC) contended that he was not entitled to the loss relief, because the trades were either not carried on on a
