Paying tax on losses from small business

susiedee_2

I'm new to this and think I've already posted elsewhere but I have completed my Self Assessment form for my small jewellery business. I have made a loss of £2196 in total (my income from the business was £455). It has given me a calculation that I owe £158.40 for tax, NIC4 and Student Loan. I don't understand this figure - never been a student, certainly haven't earned the amounted needed for NIC4. Any ideas? I'm getting desperate now.

zygurat789

Do you have any other income?

nomunnofun

Can you let us know the breakdown when you 'view your income tax calculation'?

susiedee_2

I have my main job and have put in all the details from my P60. I don't get any perks from my job. My jewellery business is a hobby that I now sell a few items from. It has been my first year and I have spent far more than I have brought in. Net loss is £2229.00.
I am assuming that there is something in the form that I have done wrong but I have been over and over it and can't see where.
The calculation says "Total tax, Class 4 NIC and Student loan due for 2011-12 £158.40" with payment due 31/01/13.

nomunnofun

You need to look at 'view your full calculation'.

Somewhere along the line there is an underpayment at your PAYE source. We would need to know the P60 details including the final code number.

With the losses, you need to claim against your other income if you wish to obtain tax relief on them. There is a section for exactly this on the online return. This should result in a refund of tax, the exact amount dependant on the details that you choose to provide.

susiedee_2

Thank you - I have just realised an error from re-looking at my P60. It now comes out that I owe 40p!? I may just go ahead and submit it anyway, presumably they will let me know if there are any major problems.

Could you tell me where the section is for claiming against my other income?

nomunnofun

susiedee wrote: »

Thank you - I have just realised an error from re-looking at my P60. It now comes out that I owe 40p!? I may just go ahead and submit it anyway, presumably they will let me know if there are any major problems.

Could you tell me where the section is for claiming against my other income?

Great - but what about the losses? If you allocate them against your PAYE income you could receive a repayment of approximately £440 (if a basic rate taxpayer). If you submit and do not choose this option these losses will be carried forward agains future trading profits from yourself employed jewellery business.

The choice is yours.

But now that you have edited your post (!!!). Go through the self employed section again - towards the end of this section it will ask you what you wish to do with the losses. I think the first option is to set against your other income. Something like this:

Loss from this tax year set off against other income
for 2011–12

susiedee_2

I will go back through it all and enter the losses. I'm so glad I came to this forum, you have been so helpful. Thank you.
Sue

nomunnofun

No problem - as I suspect that the repayment is a desirable option, please do not submit until you get that refund - there is plenty of help on here!