Self employed, supporting partner and confused!

JenniferCF

Hello

I'm new to being self-employed, and working out tax returns and losses, etc. I've spent the last couple of days trawling through forums, lots of questions answered, lots more raised!

A bit of background...

• I get a rental income which amounts to about £12,000 profit (about half of which goes on capital mortgage repayments).
• I'm not paying into a pension at the moment - I'm expecting my paid off property to serve that purpose.
• I am working to set up an adventure travel business. I started this last year (2011-12). I made no profit from this last year or this year and I don't expect to make a profit from it next year.
• I also had a proper job for five months last year.
• I am supporting my partner at the same time who is training as an outdoor pursuits instructor. This is on-the-job training (unpaid) and more or less full time,
• We haven't decided yet whether long term we will be in business together or separately.

So, a few questions people here may be able to help with!

• If I paid NI for five months through my "proper" job, do I need to pay any more?
• I understand I can choose to set the loss from starting my business against either my rental income or against future profits as long as it is the whole loss for that year. Is that correct?
• Can I off-set losses from my business against income from employment?
• Is there any tax relief available on the capital repayment of my mortgage given that this is my alternative to an earning related pension scheme at present?
• When I put in business costs (phone, internet, etc) on my tax return, do I just split these equally between my self-employed losses and rental income or can I put them all against my rental income to reduce the profits there?
• Can I claim any tax relief for supporting my partner? It doesn't seem like there's any benefit or support he can claim unless he's "available for work" in which case he can claim job-seekers.
• Can he even claim jobseekers if he's registered self employed?

Quite a lot there, and not sure it all fits into the "cutting tax" section, but as you can see, I feel like I'm wading through treacle here trying to juggle all the different issues.

All help very gratefully received!

Thank you

Jennifer

ceeforcat

1) You need to register to pay Class 2 NIC on your self-employment. You can claim small earnings exemption, reducing payments to NIl but acquire credits.

2) No. You only need to claim enough losses to 'cover' your other income. E.g. Losses 5000, other income 2000 - you only need to claim 2000 (but why do that if you pay no tax as a result). Losses 12000, other income 10000 - you claim 10000 or none at all (8105 wasted as already covered by Personal Allowances)

3) Yes

4) No - see Clapton below

5) Claim expenses which incur in each business, not simply to suit your tax position.

6) Absolutely not.

7) Not my area of expertise.

Losses are a very complicated area of taxation - not for the amateur

CLAPTON

ceeforcat's excellent response has mis counted your questions ... you asked 7 questions and ceeforcat answered 6

so what your actual 4th question was about tax relief on capital mortgage payments was left out ... the answer is no you can't claim them as pension payments as they don't meet the criteria as a pension.

the ceeforcat 4th answer was to your 5th question etc.

Mistral001

As others have said not really for the amateur. See an accountant (I am not one BTW).

With regard to the last question, no he cannot claim Jobseekers allowance if self-employed as he is in employment. He could perhaps claim Tax Credits though but you might not even want to go down that road as it gets very complex as I think the Tax Credits people have to assess both incomes in determining the amount he is entitled to.

ceeforcat

CLAPTON wrote: »

ceeforcat's excellent response has mis counted your questions ... you asked 7 questions and ceeforcat answered 6

so what your actual 4th question was about tax relief on capital mortgage payments was left out ... the answer is no you can't claim them as pension payments as they don't meet the criteria as a pension.

the ceeforcat 4th answer was to your 5th question etc.

Thanks Clapton - I have amended my post- so the advice was pretty good for someone who can't count?