Going self-employed...

LordSplodge said:
Profit is whatever is left after expenses, thus my simplified example is correct. Sure in real life you have to deal with such complexities as depreciation but why confuse the poster with such things? He asked what profit was.

You're just trying to be clever. :p
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The Inland Revenue might take a very dim view of our wood-chopping friend treating the entire cost of his axe which would serve him for many years as an outright expense:p
 
bitslice said:
meh, I've started mine (I'm completely clueless though on what's involved tax wise) but by the time I've paid the mortgage and utility bills I'm still having to dip into savings to survive. If it turns out I have to pay tax on a negative income then I'd be better off on the dole it seems.
I've no outgoings other than petrol to site and a few materials, it's all labour. (The chopping logs was just an example, I'd be dangerous with an axe :D)
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assuming you are talking about your home, your mortgage almost certainly wont be treated as an expense (rent could be) and only a portion of utilities depending on how you use your property for business, so you may well be making a profit as a business but spending it as an individual
 
Freakbro said:
If you want to get technical then that's also wrong as you could write off the full amount in the year as part of your AIA (Annual Investment Allowance) for capital expenditure :p
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walked into that one! (edit, I had of course assumed he had spent £50k plus on logging equipment already!)
 
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bitslice said:
I've no outgoings other than petrol to site and a few materials, it's all labour. (The chopping logs was just an example, I'd be dangerous with an axe :D)
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Well, if you work out what % of your vehicle usage is business to personal then you can use that % costs of car insurance, tax, repairs as well.

You just need to be (legally) creative ;)
 
like said if new contact inland revenue the will help you .

i had help visited home and even did my tax returns for 0. a lot of stuff i didnt know i could do they helped with. also how can you get any come back when they do it :p
 
If the axe has a useful life of 2 or more years it's capital in nature. If it's capital you can't deduct the cost in full when you buy it. You capitalise it to the balance sheet and depreciate it over the useful life of the axe. However, for tax purposes, depreciation is not deductible. Instead, you claim capital allowances. The good news is that the cost of an axe should be covered by the annual investment allowance, and you can claim the full cost as a deduction in the year of purchase. Failing that you can claim 20% writing down allowances per year on a reducing balance basis until you dispose of it, at which point you may have to make some kind of adjustment in your tax computation.
 
Skidder said:
The Inland Revenue might take a very dim view of our wood-chopping friend treating the entire cost of his axe which would serve him for many years as an outright expense:p
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Sure but if I was actually running a log chopping business I wouldn't be using primary school profit examples, would I? :D

Vonhelmet said:
If the axe has a useful life of 2 or more years it's capital in nature. If it's capital you can't deduct the cost in full when you buy it. You capitalise it to the balance sheet and depreciate it over the useful life of the axe. However, for tax purposes, depreciation is not deductible. Instead, you claim capital allowances. The good news is that the cost of an axe should be covered by the annual investment allowance, and you can claim the full cost as a deduction in the year of purchase. Failing that you can claim 20% writing down allowances per year on a reducing balance basis until you dispose of it, at which point you may have to make some kind of adjustment in your tax computation.
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See now this is the problem with being smart. There is always somebody who knows more about stuff that you do!
 
Vonhelmet said:
If the axe has a useful life of 2 or more years it's capital in nature. If it's capital you can't deduct the cost in full when you buy it. You capitalise it to the balance sheet and depreciate it over the useful life of the axe. However, for tax purposes, depreciation is not deductible. Instead, you claim capital allowances. The good news is that the cost of an axe should be covered by the annual investment allowance, and you can claim the full cost as a deduction in the year of purchase. Failing that you can claim 20% writing down allowances per year on a reducing balance basis until you dispose of it, at which point you may have to make some kind of adjustment in your tax computation.
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18% from next April :p
 
aproctor said:
What do you do though?

Rent boy? :D i Kid. :)
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A rent boy would probably pay better :D

I work as a rope access technician, mostly as a sub-contractor. Use climbing and caving techniques to safely carry out maintenance in hard to reach, exposed areas. I do a lot on suspension bridges, sky scrapers and the like. Very varied, love it.
 
I am also going self employed, I am a qualified Archiotectural Technician and like you thought I would give it a go, just test marketing at the moment.

Just been on a three day course with the princes trust as I am unemployed and under 30 - you may be entitled to go on this? They will also help with funding if you need it and give you a mentor for at least two years. Very helpful free support.

Also, get booked in on the HMRC free courses for becoming self employed. Better knowing where you stand.
 
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