Setting up as a sole trader, but need some unique advice...

ybrad7

Around April 2021, I started e-commerce, and can confidently say I haven't made the £1,000 profit that HMRC likes to know about to then tax, technically I have made a loss since April 2021 (This was due studying for exams so this was on and off, but there is consistency on expenses, small profit etc)

My main question is, can I register my business and claim it as a loss for the first year? Is this a normal thing that can happen? or would you always need to wait until you made profit before registering

Thanks 

Savvy_Sue

Have you got another source of taxable income? eg PAYE. If you have, then you can offset your losses from self-employment against your tax liability there. 

I don't know whether you can carry losses forward if that's the only taxable income you've got, but I'm sure someone else will be along soon if Google can't help. 

Grumpy_chap

The Trading Allowance relates to gross income, not profit 

ybrad7

Savvy_Sue said:

Have you got another source of taxable income? eg PAYE. If you have, then you can offset your losses from self-employment against your tax liability there. 

I don't know whether you can carry losses forward if that's the only taxable income you've got, but I'm sure someone else will be along soon if Google can't help. 

I do, I work fulltime, aswell as this side job, 

I thought it would be treated as 2 seperate tax's , one PAYE another self/sole trader

So lets say I've made £200 loss, can I register that and say im down £200 with the evidence if needed.

The reason I ask is I generally see people doing this with a profit to their name not a loss 

Jeremy535897

See https://www.gov.uk/government/publications/losses-hs227-self-assessment-helpsheet/hs227-losses-2022

NannaH

If you use cash basis for your self assessment,  you can’t use previous years or sideways relief,  you can only use carry forward.