Taxation for cottage industry

[FortuitousFluke]

Afternoon folks, thought I'd ask in here instead of GD as figured it's more relevant. My wife has recently started a small jewellery business that she's running as a sole trader alongside a permanent job. I've got insurances, trademarks, and website names all registered but I'm a bit unclear on the requirements around self assessment for tax.

Effectively the first couple of years we're anticipating running at a loss as we need to grow the business organically which means all turnover and then some will be invested in materials and tools. Does anybody know how this works in terms of filling in tax returns, would she still need to report earnings even though no profit is being made?

In addition if anybody has any resources they can point me to on this kind of thing it would be really useful.

Cheers in advance.

 

[FortuitousFluke]

Apologies for the late reply. Thanks for all of the advice given above, it's really useful. My wife is doing most of the hard work with the business but just having to learn about back office functions is causing me enough work!

Unfortunately I don't have a tame accountant I can approach, I'm severely lacking on the useful professionals as friends front. I think what I'll do is take on board everything that's been said in the thread and set about doing some additional reading around the subject so I'm clued up as far as possible.

In terms of the sole trader vs ltd company aspect, I'll be pushing to make the switch after the first year of trading but at the moment we're not in a position to employ a tax accountant to handle that side of the business.