Tax credit self employed offset?

Carer

I have a tax credit renewal to fill in and I'm a bit stuck on the amount of loss I can offset and would appreciate any help.
I am a partner of one very small business and a director in another Ltd Co.

I have a small profit from the partnership in 2014-15 which I would normally have just put as my income for tax credit purposes.

However in 2013 I had an inheritance of around £45k and invested it all into starting up the Ltd Co (with 3 other people) which is not in debt and growing nicely but is yet to turn a profit or pay back any of the capital loan.

So my question is - can I offset the £45k investment against the income for 2014/15 thus making an income of £0 for the year for tax credit purposes? I did not offset last year as I was unaware of the ability to do so.

zygurat789

Carer wrote: »

I have a tax credit renewal to fill in and I'm a bit stuck on the amount of loss I can offset and would appreciate any help.
I am a partner of one very small business and a director in another Ltd Co.

I have a small profit from the partnership in 2014-15 which I would normally have just put as my income for tax credit purposes.

However in 2013 I had an inheritance of around £45k and invested it all into starting up the Ltd Co (with 3 other people) which is not in debt and growing nicely but is yet to turn a profit or pay back any of the capital loan.

So my question is - can I offset the £45k investment against the income for 2014/15 thus making an income of £0 for the year for tax credit purposes? I did not offset last year as I was unaware of the ability to do so.

I'm not quite sure as to why you think you would be able to reduce your income by your savings and investments. It would be much more logical to increase your income by £45k, however, neither option is used in calculating income for tax credits.

densol_2

You cant offset a loss from a limited company against personal income - its a seperate legal entity - only if you were self employed in that business and made a trading loss ( for example - made significant annual investments in plant ) could you then seek this remedy - but not on the facts you describe.

Carer

densol wrote: »

You cant offset a loss from a limited company against personal income - its a seperate legal entity - only if you were self employed in that business and made a trading loss ( for example - made significant annual investments in plant ) could you then seek this remedy - but not on the facts you describe.

To clarify - I am self employed and work at the ltd co (currently for no wages), but also work for the partnership (which does provide a small income). The £45k was used to buy plant for the ltd co, which is a manufacturing business jointly owned by myself and 3 others.

So last year I made a profit in one business but a large loss in the other. How do I work that out for tax credit purposes?

densol_2

Carer wrote: »

To clarify - I am self employed and work at the ltd co (currently for no wages), but also work for the partnership (which does provide a small income). The £45k was used to buy plant for the ltd co, which is a manufacturing business jointly owned by myself and 3 others.

So last year I made a profit in one business but a large loss in the other. How do I work that out for tax credit purposes?

Are you a director of the company and thus an employee in respect of that enterprise ? That is not self employed. Losses made by a limited COMPANY cannot be offset against personal income

Carer

densol wrote: »

Are you a director of the company and thus an employee in respect of that enterprise ? That is not self employed. Losses made by a limited COMPANY cannot be offset against personal income

Yes I'm a director. Many thanks for your help.