UKC

Hello,

I'm in the early stages of trying to start a new business, and wondered what the tax position is.

Essentialy, the business I want ot go into requires a fair amount of equipment, and a considerable amount of effort spent learning the equipment and gaining experience and qualifications before I would be in a position to charge people for the service.

Is it legally possible (or sensible) to set up the company to exist for a year or 2 without any income, and only expenses whilst I go through this learing process for tax purposes or is this more hassle than it's worth? (I'm not talking astronomical amounts, maybe £5000 over 2 years)

Thanks in Advance

In reply to balmybaldwin:

You'll probably get more informed answers, but I remember when I had to fill in Self Assessment there are boxes for offsetting business expenses against income for tax purposes, and I think you can do that offset by a couple of years. So if you're a sole trader it might be worth looking into if you can do it by self assessment?

In reply to balmybaldwin:

You can claim the equipment you've bought as start up costs so that's fine. The qualifications you wouldn't be able to claim for unless you're already trading so trading at a loss would work unless the qualifications were essential to trade in which case HMRC could get a bit arsey if they do checks.
You can use your start up losses against your profit when you start making it.

In reply to balmybaldwin:

You need professional advice. Sole trader or Ltd company?

See an accountant. You have to show that the stuff you buy is required for your business and not for personal use. Easy if its JCB, loads of climbing kit and a laptop? Not so easy.

Cheers
Mark

In reply to balmybaldwin:

Hmm... will probably go and see an accountant then. The qualifications are required to operate commercially, so sounds like It'll be a bit of an issue, the rest is fairly clearly for business use...

Thanks for the help