Trading and professional income

A self-employed person is someone who runs their own business - known as a trade or profession.

The full amount of profits or gains associated with the business is taxed in the year of assessment. 'The full amount of profits or gains' is taken to be the difference between the income from the trade and the expenditure incurred and allowed under tax law in earning that income.

When a trader makes a loss, it can be used in two ways:

• Use it to reduce the non-trading income for the year of loss, 
  or
• Carry it forward to future years and set it against future profits of the same trade