Tax dates and start up losses

mudskippa

Hi,

I started a new sole trader business in Jan 2013. I made a small profit of £450 so far, not including the start up costs for the previous year (£570).

My other income in this tax year was only £2500K.

Is it possible to carry the whole lot forward as a loss of £120 in the next tax year? Will any of this be screwed up if I change my accounting dates? Ideally I'd like to change them to fit with the tax year.

Thanks.

nomunnofun

Sorry - need some clarification here. you say that you started your business in January 2013 but had start up costs in the previous year?

What is your current year end year end and what has been declared to HMRC to date?

mudskippa

Thanks for replying. I registered for my UTR number in January, when I started trading, so I guess my accounting year-end would be Jan 2014. So nothing has been declared as yet. I'm getting working tax credit though (which is non-taxable) so they know about that too.

nomunnofun

You still have a choice. You can complete your tax return when it is issued in a few days and declare accounts for the period from January 2013 to 31st March 2013. This can be your year end. Next year you would declare profits for the whole year to 31st March 2014. The loss of £120 can be carried forward to these accounts as you have suggested.

mudskippa

Great, thank you

nomunnofun

mudskippa wrote: »

Great, thank you

On another point - what are the start up costs? If they are of a capital nature, you may be better off not claiming anything in the first year.

mudskippa

Actually that was something else I was wondering about. Around £200 of them are capital. Small bits and pieces - a filing cabinet and video camera (Yes, solely for biz use). The rest were allowances, such as setting up a website, networking costs, business printing etc

nomunnofun

If the capital costs do create a loss of £150 to carry forward, claim them. If they, for example, simply reduce your profit, don't and claim capital allowances next year. In the second scenario the relief on the capital costs will be wasted if claimed in the first year.

mudskippa

Thanks! Yes I think i'll carry them all over to the next year. Seems to make the most financial sense.

davewright13

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