Self assessment £10k loss. Will I get a rebate?

PabloEscobar

Hi,

I hoping for a bit of advise from anyone of the knowledgeable folk on here.

Im self employed and working as a sole trader. In September 2010, I changed the main area of work, and invested £12-13,000 in vehicles which were used purely for work purposes.

Firstly, can these purchases by included in my SA as a business expense and offset against my turnover?

Also, it looks as though for the whole tax year I will have made a loss of around £10,000 (taking the above costs into account). I made a
small loss last year and got a little bit of money back so can anyone tell
me whether I'd be due a rebate of any sort this year?

I do have an accountant who takes care of everything, I would just like to know what to expect at the end of the month.

Any help would be much appreciated.

HappyMJ

Your accountant will tell you the correct answer so why ask on a forum where you are going to get random non qualified answers.

You usually can't write off the whole of capital expenditure in the year it is incurred you will need to depreciate the asset.

You won't be due a rebate but if you have any losses they can be used next year to reduce you profit in the future.

PlutoinCapricorn

Some of the posters on this board ARE accountants who complete returns for their clients, and others used to work for HMRC. I have learned a lot from their advice. Other posters have had the same problem or been in the same position, so their posts can be very useful too.

PabloEscobar

PlutoinCapricorn wrote: »

Some of the posters on this board ARE accountants who complete returns for their clients, and others used to work for HMRC. I have learned a lot from their advice. Other posters have had the same problem or been in the same position, so their posts can be very useful too.

Thanks. This is my reason for posting on here, as I have had good advise in the past. Hopefully someone with the knowledge will be along shortly.....

ceeforcat

Impossible to say from the post as too my questions arising from the question. For example, what are the vehicles? Are they cars, or vans or lorries? Only certain types of car can be written off completely- vans and lorries can. It may be better not to claim all of the Capital Allowances if your profit is insufficient to pay tax thereby avoiding the wasting of your personal allowances. Losses are an important , and sometimes complicated, tax planning area and full details are always required before deciding how to utilise them. I would, for instance, be wanting to know whether you have any other income and when you commenced self-employment and those who work in taxation will know why I have asked.

PabloEscobar

ceeforcat wrote: »

Impossible to say from the post as too my questions arising from the question. For example, what are the vehicles? Are they cars, or vans or lorries? Only certain types of car can be written off completely- vans and lorries can. It may be better not to claim all of the Capital Allowances if your profit is insufficient to pay tax thereby avoiding the wasting of your personal allowances. Losses are an important , and sometimes complicated, tax planning area and full details are always required before deciding how to utilise them. I would, for instance, be wanting to know whether you have any other income and when you commenced self-employment and those who work in taxation will know why I have asked.

Thanks for the reply. The vehicles are 1 trailer used to transport cars, 1 van to tow the trailer (lasted 2ontgs then broke down, sold in May 2011 at a loss) and 1 Land Rover to tow with.

I've been self employed since 2005, and was always making a profit until last years SA. In 10/11 SA I had z bit of PAYE part time work, but only adding upto about £1500.

I know I cant get a definate answer, but am just trying to get an idea of what to expect. I've hit harder times than expected, and sill struggle to pay any tax due.

ceeforcat

Well, the first thing is that I cannot see how any tax can be due when you have made a loss. You ave to earn 6475 in total in that year before any tax is due. The problem is how to utilise the loss - tax relief would normally be achieved by 'setting it' against other earned income - the problem is that you do not have any (apart from the 1500 upon which no tax is due anyway). I can only see that the loss can be carried forward to reduce future profits.

Did you pay any payments on account in January and July 2011 - if so, they would certainly be coming back to you. Other than that - no tax due, no tax repayable.

PlutoinCapricorn

People are advised to get several 'quotes' for work such as installing a new kitchen, so why not for tax questions!

Have you thought of asking on https://www.taxationweb.co.uk? Here is an example of a similar question there - you need to tab down:

http://www.taxationweb.co.uk/forum/will-purchasing-a-new-company-vehicle-pay-t36537.html

ceeforcat

Not sure about that plutoincapricorn - example is a Ltd Company.