Costs when startup didn't get off the ground

[PeruvianFoodLover]

I've spent the last three months working on a new startup that sadly fell through at the last minute; I'm gutted, but I know it's better then failing 6 months in!

I have incurred a number of costs - legal bills, equipment etc, some of which I can recoup through selling things on; but overall, I'll have made a loss.

Is this a loss I can legitimately declare for tax assessment purposes? I'm self-employed so self assess anyway, and the startup was a new self employed business, not a Company.

I don't think it is of any use to declare them - I think you can only carry forward and use start up costs/losses against any profits you make in the SAME business in future years. So if your business is not going ahead then I don't think there is any point. You cant use them against any income you have from any other business. If you think you might go ahead in the future then maybe carry them forward just in case.

You cant use them against any income you have from any other business.

Can't I ?

I know when I did my tax return last year, I put in details of each of my businesses separately and it all added up at the bottom so the profits from one were partially offset by the losses of another - was that wrong?

I am not sure about other ongoing businesses, maybe you can have a loss on one and a profit on another one I guess (not sure as I don't have more than one) but I think that a start up has to actually start to trade before you can use those start up costs to work out a loss if you see what I mean. Maybe someone else will know better than me!!

Yes, you can claim for these as losses and they will offset your income tax liabilities from other employment. Iwaly is thinking of losses made by a limited company.

In fact you can actually set these losses against profits made in the previous 3 tax years if there is not a sufficient tax liability in the current year to utilise all the losses.