Tax return for worker and small business?

[Emu2005]

Hello,
I work full time and have just started running a very small business in my spare time. Does anyone know which tax return (s) I have to fill in? Can't see myself declaring a profit this year on the business....
Thanks in advance!

[Tom Braider]

If you really don't expect to make a profit then I wouldn't do anything about a tax return. But make sure you keep good records of sales and costs so that if you do make a profit you'll be able to declare it accurately. If you make a very small profit - say �100 or so - you would probably be able to declare it as "miscellaneous income" but if it gets much larger you'll have to register your self-employment, after which you'd get a tax return with both emplyment and self-employment pages. If you do register your self-employment, ask HMRC about "low earnings exemption" from Class 2 NIC. Don't forget that if you make a loss you should declare that, too.

[minuteman]

There is no special Tax Return for low earnings or loss making enterprises. You should register for self employment usung the IR website and they will send out a return each year (or you could file on line). If you have made a loss, you can offset this against other income and receive a rebate for tax overpaid.

[Emu2005]

OK thanks. As I won't be making a profit I won't do anything this year. Can I ask minuteman, you say to register as self employed on the IR website, but I am employed as well so wouldn't this be incorrect? Sorry just a bit confused... :-)

[Tom Braider]

minuteman is right about there being no special return - you declare miscellaneous income on an ordinary return. It's quite common to be employed and self-employed at the same time; to register your self-employment with HMRC won't affect your PAYE record unless you want it to (when you make a profit). I'd phone HMRC instead of using the website; that way you can explain your exact circumstances.

[Emu2005]

So just to clarify, if I'm not making a profit this year do I need to fill in a return?
Thanks for all your help

[minuteman]

As you have a new source of chargeable income you do need to register as self employed within three months of commencement. As stated earlier, though you may get a pleasant surprise in that any loss incurred (which includes allowances on capital expended) may give rise to a tax refund. Either way the system is, sadly, not voluntary !.

[Skyline D]

The previous replies are not correct. They are correct in that you do need to register as self employed with HMRC (and should have done it within three months of ctarting) but whether you make a profit OR a loss you do need to do a tax return.

[minuteman]

Re Skyline - I don't recall saying you that there is no obligayion to complete a return !. If as required, a person with a taxable source of income registers with HMRC, a notice to complete a Return each year will be issued. Penalties are charged for non compliance. As I alluded to before membership of this club is not voluntary !

[Skyline D]

Apologies minuteman. I meant Tom Braider's previous replies that implied you could ignore it if it was a loss.

It could have been phrased somewhat better on my part.