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Hi.You cannot offset the cost of equipment against your PAYE earnings without actually starting a business. As far as everyday expenditure (revenue expenditure) is concerned, under the pre-trading expenditure rules you can treat that expenditure as if it was incurred on the first day of trading. You can read about the pre-trading expenditure rules here. An example of everyday revenue expenditure would be rent for business premises or payment for a business telephone line for example.If you incur pre-trading capital expenditure, on computers or a van for example, you can introduce those into the business at the lower of their value or cost as if the expenditure was incurred on the first day of trading. Read about capital allowances here and here.At the end of your first period of trading, you draw up your accounts to determine your profit or loss and, if you are operating as a sole trader, you disclose those figures in your self-assessment tax return. The revenue expenditure you have incurred is simply claimed as expenditure against income of the business. You claim capital allowances to write off your capital expenditure either in one go under the annual investment allowance rules or over a period of years under the writing down allowance rules. To make life easier, I would recommend you draw up your accounts to 31 March or 5 April to coincide with the end of the tax year. The HMRC helpsheet HS222 here is a good guide on calculating your profit or loss.If you have a loss in the first four years of trading, you can choose to offset this against other income for up to three tax years earlier. Alternatively, you can claim it against other income of the same tax year, the previous tax year or carry it forward for offset against future trading profits from the same business. Take a look at the HMRC helpsheet HS227 here for information on how trading losses can be claimed.
If you operate your business through a limited company, you cannot offset trading losses against your personal income.I hope this helps but let me know if you have any further questions.