Taxes can take time and money away from you. It’s even worse if you have to deal with filing a tax return when you have made no money. However, time and money is no excuse in the tax mans eyes so unfortunately you may well have to file a tax return even if you have made no money.
Tax Returns & Self Employment
Are you registered as self-employed? Then, HMRC requires a way to watch your earnings, regardless of any profit made. The Government Tax collector keep track of your earnings with a self-assessment tax return, an important document, as its a legal requirement.
It’s actually a good thing if your 1. self-employed and 2. your business has made a loss. What, why? Well, firstly, you will not pay any tax and secondly, it can be beneficial to note this loss on your tax return so that you can set tax losses off against any future business profits.
So, a bad year can in fact be a good year. You can reduce your taxable profits in the future by this loss, saving you tax in later years.
HMRC £1,000 Annual Tax for Trading & Property Income
For those that have not yet registered as self-employed with a gross income (before costs and expenses) of £1,000 or less, then you may not need to fill out a tax return after all.
You can find out more whether you are eligible for the £1,000 trading allowance here.
HMRC has a great tool to help you establish whether you need to submit a tax return here.
For more information we provide a Business Consultation to fulfill all your business needs.