Question about the Revenue and previous tax year loss before starting trading

(6 Posts)
KirstyJC Mon 07-Jul-14 09:34:42

Hi all

I am in the final stages of setting up a little part-time business from home. Just sorted insurance and now need to know about the Revenue.

From July 2013 to now, I have kept all the receipts etc for the purchase of equipment and samples for my business. I wasn't sure (until today) that I was going to go ahead with it, but I thought I might so kept everything anyway. It would just have been a hobby otherwise.

I haven't started trading yet but will shortly. In the tax year 2013 - 2014 I had a loss of about £1k which was my start up costs, and no income. For the current year there would likely be a profit, albeit a small one, as most of the costs are one-offs already paid out.

So, my question - if I register from now as a sole trader I presume I need to do a tax return for 2013 - 2014 by end of this year which would just be my losses. Do I get to carry this loss forward to the current year? Ie in this year 2014-2015 can I make a 'profit' of £1k before I break even? Or as this loss was before I started trading, is it ignored?

It seems like it must be carried forward as I would imagine lots of businesses have start up costs that are from the previous tax year and before they started trading, but I can't find that bit on the website.

I am also a bit unsure about the Tax Credit implications but I assume it's only profit that counts as income. (I am mostly PAYE employed and that won't change). I would imagine that a loss last year is irrelevant for Tax Credits purposes, since I wasn't trading then and have finalised that year's award anyway.

Gah - why does it have to be so complicated!?!?! Why can't I just sell stuff- I thought getting customers would be the hard bit!

Any help would be gratefully received. I am planning to call the Revenue soon but would really love to have a bit of an idea what I'm talking about first! smile

KirstyJC Mon 07-Jul-14 20:13:22

Anyone? smile

jaybeme Tue 08-Jul-14 11:56:40

Bit over my head I'm afraid confused Have you had any advice for starting-up your business? I went on a Welsh Gov funded startup scheme and they gave general advice on accounting - they also had an accountant available to get specific info from. Have you anything like that where you are?

Gfplux Tue 08-Jul-14 20:09:05

Why not call the revenue and ask. Or check the web site as it might have the answer there.

KirstyJC Tue 08-Jul-14 21:17:57

Hi Guys, thanks for your replies. I have checked the Revenue website and it doesn't say and I do intend to call them before I start trading, I was just hoping to get some guidance so I know what questions to ask! Don't worry, and thanks for the replies. (I always think "ask Mumsnet" as I think you lot know pretty much everything, but I must admit this is quite specific!grin)

Not had any advice about starting up, maybe I should look into that. I think I'll see what the Revenue says first.

Rowingdowntheriver Sat 26-Jul-14 03:51:36

You may already have the answer from HMRC now but if not, you may be able to offset your start up losses against other income you earned (e.g. From employment) in the tax year 2013/14 rather than wait and deduct from future trading profits.

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