Hi extopia,
I am not an expert, but I understood that your trading losses can be offset against your income from all other sources in the same year.
So if I am a self-employed shopkeeper and make a loss of €20k I can set it against my paye income of €50k, and so only pay tax on €30k.
However, I think it is a requirement that the trade must be carried out with a view to making a profit. If the Revenue judge that it is only being carried out to fund a hobby, then the losses would not be claimable.
Brendan