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How do I report a tax liability adjustment for a loss carried back?

When you carry a loss back to an earlier year, HMRC gives the relief as a decrease in this year's tax, not by reopening the earlier year. Enter the decrease on Tax → Tax liability adjustments, and record the matching carry-back claim on Losses & Claims before your final declaration.

Where to find it in EasyTaxer: Tax → Tax liability adjustments

A still from the video: a dark green title slide labelled MTD for Income Tax, Year end, listing two numbered steps, A decrease this year and Plus a losses claim, with the EasyTaxer logo in the corner, under the title Carrying a loss back?

Video coming soon

The video for this page is coming soon. The steps below describe everything it will show, in the same order.

Step by step

  1. Work out the decrease: the difference between the earlier year's tax and what it would have been with the loss included.
  2. Open Tax → Tax liability adjustments and pick the tax year (2026-27 or later, once it has ended).
  3. Enter the decrease in the boxes HMRC asks for, leaving a box blank if there is no adjustment of that kind.
  4. Record the matching carry-back claim on Tax → Losses & Claims, then select Submit to HMRC.

Steps: the text version of this video

  1. The short answer

    When you carry a business loss back to an earlier tax year, HMRC gives you the relief as a decrease in this year's tax, rather than reopening the earlier year. In EasyTaxer, you enter that decrease under Tax, then Tax liability adjustments.

  2. Working out the figure

    HMRC's helpsheet on losses says how to work it out: the difference between the tax for the earlier year, and the tax there would have been if the loss had been included. If you need help with the calculation, contact HMRC's Self Assessment general enquiries.

  3. Entering it

    On the page, enter the decrease split the way HMRC asks for it, for example Income Tax, and Class 4 National Insurance. Leave a box blank if there's no adjustment of that kind.

  4. The matching losses claim

    You must also record the matching carry-back claim on the Losses and Claims page before your final declaration. HMRC won't accept an adjustment on its own.

  5. When

    Through Making Tax Digital, this is for 2026 to 2027 onwards, and HMRC only accepts it once the tax year has ended: for 2026 to 2027, after 5 April 2027. For earlier years, you use your Self Assessment tax return or HMRC online services.

  6. EasyTaxer is recognised by HMRC for Making Tax Digital for Income Tax. You'll find it at easytaxer.com.

Related

Checked against EasyTaxer on 26 September 2026. Screens can change between releases; if something here does not match what you see, please tell us.