Do I have to pay tax on low profit business?

[jamie596]

Hi,

I have recently set up a small business from my home. I have registered a business name, but have not yet registered for tax. I was told that I may be exempt from tax as the profit is extremely small. Could you please let me know if there is a certain amount that an individual can earn each year without having to declare it? I would be very grateful for any advice that you can give me.

Regards,

Jamie.

 

[Dearg Doom]

Depends on your other incomes. If you've no other income, then if the income from this business is small then it may be less than the tax credits. In short you have to declare it, how much tax you pay on it depends on your other circumstances. There is no special treatment for profit from your home business.

 

[dam099]

Hi,

I have recently set up a small business from my home. I have registered a business name, but have not yet registered for tax. I was told that I may be exempt from tax as the profit is extremely small. Could you please let me know if there is a certain amount that an individual can earn each year without having to declare it? I would be very grateful for any advice that you can give me.

Regards,

Jamie.

You will have to declare it regardless of how much it is. Whether you will then have to pay tax on it depends on your full circumstances such as other income etc as mentioned. If you are working and already paying tax on other income then you will almost certainly have to pay tax on the profit.

 

[podowd]

You will need to notify the revenue that you have self employed income - you can register using the Form TR1 - download it from [broken link removed]

If your income is relatively low your allowable expenses & tax credits may be enough to wipe out any tax liability but you will still need to declare on your tax return

 

[Squonk]

Expanding this thread if I may....a colleague of mine here at work has a small business on the side as a sole-trader. He tells me that any loss he makes (and he always makes a loss!) on this business can be offset against his PAYE income thus reducing his overall dues to the taxman. Is this true, or is he taking the mickey?

 

[bazermc]

He tells me that any loss he makes (and he always makes a loss!) on this business can be offset against his PAYE income thus reducing his overall dues to the taxman. Is this true, or is he taking the mickey?

Yes it is true only the loss in the year maybe offset against total income - provided the loss he/she makes is calculated as per the tax code not all expenses are allowable for tax purposes...i presume he is not operating not a limited co

again as per the last thread if he/she is in business and irrespective of whether or not a profit or loss is being made a tax return needs to be made each year.....in short they need an accountant!