Second Business-PAYE

Hello all from a newbie,

I am employed by a Co. and PAYE, but I'm about to start a second business in the form of a small taxi company. In searching through the multitudes of information available I've confused myself about what I can and can not write off against my PAYE during the difficult first few years.

Can I, for instance, re-claim a proportion of the purchase cost of the vehicles if the Co. doesn't return a profit? I understand that there are specific write down proportions (25% of vehicle value not exceeding £3000 PA) but can this ONLY be offset against any profit that the Co. might make, or can I in fact claim it against my own PAYE.

Thanks in advance.

You need to calculate the profit and loss as a self-employed person, and taxis are a little complicated due to the fact that different capital costs are calculated at different rates for capital allowances. I would suggest that you get a tax advisor or accountant to help you with this.

If you make a loss in your self-employment you have the option to set this loss against your PAYE income in the same year.

If you are setting up a Ltd company the losses of the company can not be set against your PAYE, as a company is a separate legal entity.

Therefore you should take advice on which way you should operate your business before setting up the company.

No - can't claim against Paye income. Can only offset any losses against profits.