Self Employment expenses/equipment

schmooo_2

Hi, First post for me, can any one advise ? I am full time employed and just starting to build up my small self employment work, weekends etc. I will continue to be employed and self employed. Have just been paid for my first job as self employed. I have been building this business up for the last 10 months, have not earned much yet about £220.00 last week, however since taking this step I have purchased a lot of equipment aprox £6,000 worth mostly bought 8 - 10 months ago. If I register now as self employed can I put this equipment down on my self assessment form in April even thou I have not earned any money yet. I understand that I have to register as self employed within 90 days of commencing does this mean that any equipment for the business purchased before the commencement date of self employment can not be claimed for? many thanks.

chrismac1

Pre-trading expenses can be claimed from up to 7 years ago. You should be able to use the capital allowances on your equipment to generate a taxable loss for 10-11 tax year. The most efficient use of this could well be against earned income in the 10-11 tax year, but not necessarily. If your business is doing well, it will almost certianly pay off to choose 30 April 2011 as your first year-end, but this makes it trickier to do your own tax return - so if you're DIY then just choose 31 Mar 11.

schmooo_2

so, if I do enter this £6,000 as capital allowances and only earned £220.00 in my self employment would it be that I may be due a tax rebate as i would have paid tax on my full time employment.? my business is going to be a very slow burner so earnings will be low for 11-12 tax year too.

jason.parker.86

Yeah I would put the 6K against Annual Investment Allowance and that is 100% claimable.
You would then be due tax back on £5780 that you paid in your full time employment.