I am starting up as a sole trader some time in Febuary. I am going to be incuring about £800 start up costs but am unlikely to make much money until the following financial year. i.e. April this year.
Is there any way that these costs can be incuded in the following years tax calculations?
I am concerned that my tax return for the 2011-12 year will involve a lot of expences and the 2012-13 will have more profit and so I will get taxed more.
Hope I have explained this properly and I would appreciate any help.
Did you have any other income for 2011/12? eg employment income, bank interest, rental income.
What about tax year 2010/11 or earlier tax years?
If you have a loss you can offset against other income in the same tax year or the previous 3 years (in the first year of trading). There are special rules that need to be applied and basically you need to use the full loss in the year (even if this wastes your personal allowance).
Another option is to wait until 6 April before starting the sole trader business and put all the costs in tax year 2012/13.
