This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

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:360
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:360
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.


Return to “Income Tax”