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Tax Liability Adjustments

This guide explains how to record Tax Liability Adjustments in My Tax Digital — a screen that records the effect of a loss carry-back claim on your tax bill for the current tax year.

Availability: This screen is only available for the 2026-27 tax year onwards. It does not apply to earlier tax years.

1. What this screen is for

When you carry back a business loss to set it against an earlier tax year (using the Carry Back section of the Loss Claims screen for a business), that claim reduces your tax bill for the earlier year — but HMRC still needs to know the effect this has on your current tax year's overall calculation.

This screen records the resulting decrease to your:

  • Income Tax liability
  • Class 4 National Insurance contributions liability
  • Capital Gains Tax liability

You must submit both. A carry-back loss claim on the Loss Claims screen and the matching decrease figures here work together — HMRC's calculation depends on both being present.

2. Overview

Tax Liability Adjustments overview

  • Tax year: The active tax year these adjustments relate to.
  • Last submitted: The date and time these adjustments were last updated, if any have been submitted.
  • Prepare update: Click to enter or amend your adjustment figures.

3. Carry Back Losses Decrease

Update Tax Liability Adjustments

Field Description
Income Tax decrease The reduction in your Income Tax liability for the current tax year resulting from a carry-back loss claim.
Class 4 NIC decrease The reduction in your Class 4 National Insurance liability for the current tax year resulting from a carry-back loss claim.
Capital Gains Tax decrease The reduction in your Capital Gains Tax liability for the current tax year resulting from a carry-back loss claim.

You must enter at least one of these three figures to submit. Click Submit (or Update if you have already submitted adjustments for this tax year) to send your figures to HMRC.

4. Deleting Adjustments

Click Delete to remove your submitted tax liability adjustments for the current tax year. You will be asked to confirm before the record is deleted.