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Setting off losses against PAYE
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PaulCooper
Posts: 296 Forumite


in Cutting tax
At present I am employed and pay tax via PAYE.
I’ve recently purchased some land that qualifies for Single Farm Payment
The money the land will generate via the Single Farm Payment, Grassing rights etc won’t cover the money that I’ll pay in maintaining the land, therefore I’ll make a loss. In itself this isn’t a problem as I didn’t buy it to make money. My question is, can I set the loss I make on the land against the tax I pay (via PAYE) on my earnings.
Monies going in and coming out (in other words the loss) will not be within a company or partnership
Thanks for any advice
Paul
I’ve recently purchased some land that qualifies for Single Farm Payment
The money the land will generate via the Single Farm Payment, Grassing rights etc won’t cover the money that I’ll pay in maintaining the land, therefore I’ll make a loss. In itself this isn’t a problem as I didn’t buy it to make money. My question is, can I set the loss I make on the land against the tax I pay (via PAYE) on my earnings.
Monies going in and coming out (in other words the loss) will not be within a company or partnership
Thanks for any advice
Paul
0
Comments
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Yes you can - but.......
As with any business, it must be 'with a view to making a profit'. A business, and yours is a common example, may be regarded as a hobby as there is never any prospect of a profit - losses will not be available for relief.
It is a long time ago but I do remember advising clients to ensure that there was a profit every so often to eliminate such a challenge.
http://www.hmrc.gov.uk/manuals/bimmanual/bim20090.htmThere are 10 types of people in the world - those who understand binary and those who do not. :doh:0 -
And stating that "I didn’t buy it to make money" would be taken as evidence that there was in fact no 'view to making a profit'.
HMRC are actually quite up on the issue of 'hobby farming' and the allowability of losses. There's a well section in the manual devoted to it - http://www.hmrc.gov.uk/manuals/bimmanual/BIM85600.htm .
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Thanks both for the info, I had heard that it needed to make a profit one year in seven.
I use the phrase loosely about making a profit, obviously I'd like to make it pay, but I'm not going to depend on it.
Thanks again, I'll have a good read of the info on the link
Paul0 -
single payment scheme ends this year does it not?0
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Yes but it's being replaced with something else, can't remember the name but essentially the same thing
Paul0
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