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Sam
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Category: Tax
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I am self employed and pay income tax every 6 months. Can

Customer Question

I am self employed and pay income tax every 6 months.
Can I use the tax money ( most of it ) that I am due to pay for January 2017 to fund an internet start up company ( which is a new idea and needs patent/ development/marketing - using a development firm ) ?
In the first year -
what happens if I make a profit ? ( ie how is tax calculated considering that I have used the tax money )
what happens if I make a loss ?
Submitted: 8 months ago.
Category: Tax
Expert:  Sam replied 8 months ago.
HiThanks for your question - I am Sam and I am one of the Uk tax experts here on Just Answer. No the tax is still due and you will be expected to pay this regardless of this new venture If you make a profit in the first year then you will be liable to tax (either income tax or corporation tax depending on whether you stay as a sole trader or establish a limited company) and if you make a loss this can be carried forward (if a limited company) to offset against future profits or if a sole trader then you can offset against profits from your originating sole tradership It may well be that HMRC can recognsie the research and Development as a limited company and I have added a link here in case you might qualify for this https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief Let me know if I can assist further Thanks Sam

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