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Where Taxpayers and Advisers Meet

Self Assessment and Refund Query

taxi4cgd
Posts: 1
Joined: Mon Apr 15, 2019 3:20 pm

Self Assessment and Refund Query

Postby taxi4cgd » Mon Apr 15, 2019 3:35 pm

I have been out of work for over a year and trying to establish an online business using savings/redundancy income so have not paid myself an income in 2018-19 Tax Year. I have only generated a small sales figure which makes it look like I have made a profit. Is there a way to show this as a 'loss' or do I still have to pay tax even though I've not earned a living wage - and not applied for benefits (yet) ? The SA online system does not seem to cater for my circumstances but I'm hoping there is a way to get a refund on tax paid in previous years - is this possible?
All advice gratefully received.

Jholm
Posts: 59
Joined: Mon Mar 11, 2019 4:22 pm

Re: Self Assessment and Refund Query

Postby Jholm » Mon Apr 15, 2019 5:24 pm

It sounds like you have a substantial misunderstanding of how taxation works, which I say kindly of course.

For the 'business', you profit/loss is calculated using 'business' income and 'business' expenses. If I am reading correctly, it sounds like you are considering that you made a loss due to living expenses, which are not allowed for tax purposes.

Benefits, although likely taxable/reportable on a return, would not form part of your income, much like your home mortgage/rent is not part of your expenditure.

In a very broad generalisation, your sales figure is reduced by your related expenses. For example, you buy some stock at £1,000 and sell it for £2,000 whilst paying £100 in auction fees.... your profit is £900.

Jholm
Posts: 59
Joined: Mon Mar 11, 2019 4:22 pm

Re: Self Assessment and Refund Query

Postby Jholm » Mon Apr 15, 2019 5:25 pm

Also, if you are starting up a new business, you will not be able to create a loss to generate a refund from years gone by.


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