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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3829
Experience:  FCCA FCMA CGMA ACIS
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, i became self employed 17/03/14 and so have to fill in

Customer Question

, i became self employed 17/03/14 and so have to fill in a self employed tax return ( up until 5/04/14 by Janurary. Previously i was employed and had two sets of employment in the same tax year 2013-14 earning total of £19775 and paying through PAYE £2163 in tax. on setting up i bought a van and other set up things however received no income as self employed in that year, so as self employed made a net loss of £6392.00. does this loss come of next years tax bill or should i get a cheque - as i'm new to this i don't quite understand how it works ( Filled in self assesment tax return and it says i owe them £98.00 ). any help would be greatfully received. Jonathan.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
, I'm Keith and happy to help you with your question.
The Gov UK web site gives the following guidance:
'Certain trade losses may be offset against general income or chargeable gains in the same year. It may also be possible to carry trade losses back to earlier years or forward to subsequent years.'
So you could offset losses on self employment against your employed income. Alternatively you could carry the losses forward against future self employment income in subsequent tax years.
I trust you have claimed 100% of your van's cost through the medium of capital allowances. you could not do this with a car so easily, but you can with a van. You would receive a 100% allowance .
It sounds to me as though you may not have completed the self assessment tax return quite correctly. Perhaps you should consider using a local, trusted professional to assist you. The cost would not be onerous and you could learn from him.
I do hope I have been able to shed some light on your position.
Customer: replied 2 years ago.

Thanks , however it's all still a bit complicated. As return has to filled in by end of jan, i might be pushing to accountant. However on my tax return it says box 32 net business loss £6392.00. Boxes 33 is loss from this tax year set off against other income -14, (nothing it that box ), box 34 is loss to be carried back to previous years ( Nothing in that box ) and box 35 is total loss to carry forward after all other set-offs (£6392.00) in this box, is this correct or should i put the 6392 in box 33 ?

Expert:  bigduckontax replied 2 years ago.

Accountants and their staffs are used to being swamped as tax deadlines approach. Personally, I much prefer paper filing which gives you bags of time!

You could put your loss in either boxes 33 or 34 or perhaps you need to split the loss between the two. It all depends upon your employment income. You should try to reduce this to as close to your Personal Allowance (PA) as possible by utilising losses. Any losses not so used can be carried forward. Remember that your PA is a 'use it or loose it' allowance [HMRC speak] so be careful to use it to its fullest effect and not to waste any.

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Customer: replied 2 years ago.

Sorry, i still don't fully understand - can i choose which box to put the loss in or choose how much of the loss i put in each box ? If my total income was £19775 and i paid £2163 by PAYE, then went self employed and paid out £6392, (filed £5100 under AIA), and had no income from self employed which box would be best to put that figure in to maximise the amount of money if any i could claim back asap of the inland revenue because at minute i'm also paying 20% under cis scheme this year, which is strangling cash which is needed ? regards Jonathan.

Expert:  bigduckontax replied 2 years ago.
Clearly in your circumstances Box 33 is the right place to put your loss.
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Expert:  bigduckontax replied 2 years ago.
Thank you support.

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