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Business Start Up
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Hi, a question for any tax specialists out there! I am just starting up my own business and am going to register the business after April 5 because I am not actually trading yet and I am assuming it will make it easier for the tax return. However, I have already spent money on hardware that I need, also stationery, business cards, flyers, business insurance, a domain name, a website etc. Can I offset these costs against my business in the tax year 2014/2015 even though they were purchased in March 2014?
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It's been years since I had any dealing with Tax, and there have been so many changes it makes my head spin.
To be sure, I'd phone your local tax office, but I think you should be able to off-set them, as without investing in your hardware, you wouldn't have been in a position to set up your business in a professional manner.
It may just depend on the dates of your expenditure too.
To be sure, I'd phone your local tax office, but I think you should be able to off-set them, as without investing in your hardware, you wouldn't have been in a position to set up your business in a professional manner.
It may just depend on the dates of your expenditure too.
Somewhat oddly, you can't register a new business before it starts trading anyway; you can only register it within 3 months of commencing trading. HMRC are therefore used to registrations occurring after initial expenditure has been made (even if it was in an earlier tax year) so you should have no trouble in deducting your set-up costs from your income in order to arrive at your profit for the first year.
Further (unless you're setting up a limited company) it's will be the 'self-employed' rules (rather than the 'company' ones) which will apply. Then, if your turnover for the first year doesn't exceed £77,000, you don't even need to itemise your expenditure anyway; you simply fill in the total. Even if your turnover exceeds £77,000 you only have to fill in total for things like 'costs of goods bought for resale or goods used'; the chances of HMRC actually wanting to see your receipts are extremely low.
Further (unless you're setting up a limited company) it's will be the 'self-employed' rules (rather than the 'company' ones) which will apply. Then, if your turnover for the first year doesn't exceed £77,000, you don't even need to itemise your expenditure anyway; you simply fill in the total. Even if your turnover exceeds £77,000 you only have to fill in total for things like 'costs of goods bought for resale or goods used'; the chances of HMRC actually wanting to see your receipts are extremely low.
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