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

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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 

Comments

  • Savvy_Sue
    Savvy_Sue Posts: 47,303 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    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. 
    Signature removed for peace of mind
  • Grumpy_chap
    Grumpy_chap Posts: 18,218 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The Trading Allowance relates to gross income, not profit 
  • ybrad7
    ybrad7 Posts: 13 Forumite
    Eighth Anniversary First Post
    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 
  • NannaH
    NannaH Posts: 570 Forumite
    500 Posts First Anniversary Name Dropper
    If you use cash basis for your self assessment,  you can’t use previous years or sideways relief,  you can only use carry forward.
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