Terrified by tax bill! Can I claim for 2013-14 losses

purdyoaten

jimmo wrote: »

If you are going to get any useful advice here I think you really need to get your own act together and come to terms with tax years.
This year is 2013/14 which ends on 5 April 2014.
Last year was 2012/13 which ended on 5 April 2013.
The year before that was 2011/12 which ended on 5 April 2012
From your posts my guess would be that you made a significant profit in your first year of trading which was 2011/12 but the tax due for that year was payable on 31 January 2013 and, if you haven’t paid that yet, your tax affairs are in a terrible mess because HMRC will have been chasing you for money for the last 12 months.
If you made a loss in 2012/13 then no new tax will be payable on 31 January 2014 so HMRC are not going to be chasing you for any more money than they already are.
There are, at least, 2 possible opportunities for you to set losses from one year of trading against an earlier year’s profits.
Those are under Section 64 and Section 72 ITA 2007.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM85010.htm
However the choice of which option would be better for you depends on whether I have interpreted your situation correctly and whatever other income you have received.
This is quite complicated stuff but if you can get the basics right I think you can get an awful lot of help here but if you already owe tax for 2011/12 and can’t really follow what I have written you would be far better to find yourself an accountant to sort it out for you.

Indeed - I have to admit to being totally lost with regard to which tax years have a profit or loss associated with them. Perhaps, as requested in my first post, we could have some figures before we decide whether we are dealing with losses or simply reductions in payments on account!

zygurat789

jezbutler wrote: »

Hi

Okay - maybe I should have an accountant, but certain fields on the online SE form are quite hard to understand. Due to a freak lump sum for work carried out in my first year of trading (2011-12), I'm now faced with a large tax bill. his year (2012-13), I have made a huge loss and am going to find it hard to pay this. On the form, there is a line:

Any 2013-14 repayment you are claiming now

Can I make a claim based on a projection of this years loss? If so, do I simply place the assumed loss value here?

Yours hopefully


Jez

What you need to do is quote actual periods and their profits specifically

paulineb_2

To be honest, speaking as a sole trader, I do understand that income can vary a lot over different tax years, I dont know the answer to the question you are asking, but I do know that you can carry losses forward and I believe you can also carry them back.

Phone HMRC would be my advice, I had to phone them on a couple of occasions this year when I had a query about a certain part of my self assessment form.

But, if you do make a large profit one year, of course you are going to end up with a tax bill, you shouldnt be surprised that you will end up having to pay a bill and given that self assessment returns work on the previous years record keeping, youve known since you banked that large sum of money that youd have to pay tax on it, its a very good idea to put a proportion of money aside so that you dont come unstuck when its time to pay what you owe to HMRC.

jamesml

If you have actually made a loss then in theory you could carry that back, but you'll need to complete the accounts for the year which included the loss as well to prove you've actually got a loss. If you have just made a low profit (£3k?) this year then you don't have a loss - in which case I suspect your tax will still be due.

Get an accountant, get some proper advice and set up your affairs going forward so that you save for your tax bill as you earn the money, rather than having to find it later on. If you are going to be self employed you have to be strict with yourself - this must have been one of the reasons PAYE was invented!

jezbutler

Thanks everyone. I'm up to date with my payments... I just have an unexpectedly large bill due at the end of the month (my fault for not keeping on top of things), and I was looking at potential ways to spread the cost.

I have learned my lesson.

jezbutler

Hi everyone

I've sorted the issue: this is my first year of profitable trading, therefore my first tax bill. I was confused by 'payments on account', which I have now reduced, resulting in figures that reflect my situation.

I don't use an accountant, as every single transaction is carried out through my dedicated online business account. The account allows me to download every statement as an Excel spreadsheet, so the process is simple.

Thanks for your advice, and apologies for the confusion.

Jez

zygurat789

jezbutler wrote: »

Hi everyone

I've sorted the issue: this is my first year of profitable trading, therefore my first tax bill. I was confused by 'payments on account', which I have now reduced, resulting in figures that reflect my situation.

I don't use an accountant, as every single transaction is carried out through my dedicated online business account. The account allows me to download every statement as an Excel spreadsheet, so the process is simple.

Thanks for your advice, and apologies for the confusion.

Jez

That's not what you use an accountant for. You should always do akll the bookkeeping yourself.