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Kyoto

Tax Advice!

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Funny place for tax advice, but it's probably not worth me consulting a professional.

I am full time employed in high tax bracket.

I am running a small side business online - 2 websites. These have incurred costs of approximately 1000 and have not yet made profits.

Am I able to claim any of this back against my PAYE tax? Do I need to be registered in any way, or can I just save my invoices and fill in a tax return?

Any hints apprecaited!

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Funny place for tax advice, but it's probably not worth me consulting a professional.

I am full time employed in high tax bracket.

I am running a small side business online - 2 websites. These have incurred costs of approximately 1000 and have not yet made profits.

Am I able to claim any of this back against my PAYE tax? Do I need to be registered in any way, or can I just save my invoices and fill in a tax return?

Any hints apprecaited!

I think the answer is yes, its called start up relief or something.

http://www.desktoplawyer.co.uk/dt/browse/l.../S75866-32898X/

Its only applicable in the first few years of trade. Hope this helps. Be wary of tax advice you get on here though, there is an awful lot of rubbish spoken about tax laws.

edit to add - I think you can carry the loss back to prior years if this is more tax efficient.

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Funny place for tax advice, but it's probably not worth me consulting a professional.

I am full time employed in high tax bracket.

I am running a small side business online - 2 websites. These have incurred costs of approximately 1000 and have not yet made profits.

Am I able to claim any of this back against my PAYE tax? Do I need to be registered in any way, or can I just save my invoices and fill in a tax return?

Any hints apprecaited!

I think so but I'm not sure, but I am sure you should submit it as a loss on your tax return. They can only say 'no' at worst.

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I think so but I'm not sure, but I am sure you should submit it as a loss on your tax return. They can only say 'no' at worst.

Yes, it's your TOTAL income that counts and any loss in one part can be offset against profit/earnings in another.

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Yes, it's your TOTAL income that counts and any loss in one part can be offset against profit/earnings in another.

Yes you can. I am in the same boat as you but finally profitable.

You need to first tell the IR that you have self-employment income. They will give you a form to fill in and you will now start to receive a request to do a tax return. This self-employment section in the tax return is then where you file your P/L. You can have a different tax year but for simplicity I go with the standard April/April.

You must also register as self-employed for NI. Ask for a small earning dispensation. This means you won't have to pay the Class 2 NICs until you are profitable (or is that income) over 3 grand.

You can offset your losses against income. If I were you I would not try to mess with your tax code, in any case I don't think it will - business income being so variable.

Basically in your tax return you have a choice whether to offset against your current income or to carry forward the loss. Personally, I preferred to carry forward the losses in Y1 to future years. Same in Y2. Finally in Y3 and Y4 I am using up these losses.

I could easily have gotten myself a refund each year instead of carrying forward the loss but it would not surprise me if you stand a higher chance of being investigated for such behaviour. After all, anyone could make up a loss and try to offset it. Also, it keeps my personal and business stuff separated, good practice if you ever decide to go Ltd.

Also you need to be careful about your expenses. Are they running expenses or capital costs? My web activities are all running expenses so can all be offset. But if you have heavily invested in capital then I believe that you cannot offset capital costs against income (I may be wrong on this). This is something I need to consider for my next return due because in the most recent tax year I have outsourced some work for new projects.

Oh yeah, get yourself a business bank account too. Forget Lloyds they are sh it, they wouldn't give me a credit card so useless. HSBC are pretty good, they gave me a "business card", basically a charge card that works like American Express, no credit beyong 30 days, no "official credit". I don't know about others - I think Natwest are OK. You nearly always get free banking for the first year.

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