Hi All! I think I have a simple question, so I hope someone can help me. I'm a stay at home mom who doesn't work outside of the home, but I teach music for a few hours each week and I'm doing my taxes (Short Form SA103S). I'm required to file because I'm self employed and I need to know about bringing forward a loss.
In short, I recorded a loss last year (2010-11) of £1269 (bought a piano) and this year (2011-12) I have a second loss of £499 (bought a cello). Should I combine both of these losses and fill in the total in box 34 'Total loss to carry forward after all other set-offs' or do I only record this year's loss in this box of £499. Any advice would be appreciated.
-- Edited by wedhappily on Tuesday 15th of May 2012 07:59:26 PM
-- Edited by wedhappily on Tuesday 15th of May 2012 08:00:06 PM
The instruments are capital assets. They would last more than a year, hopefully and be entered on the balance sheet. There might be an element of private use if you're prone to doing a Mrs Mills round the old joanna now and again.
Have a read of the Helpnotes for Capital Allowances and come back to us with any questions that arise. I think it was box 3.9 at least last year.
Hi Tim, Thanks for the help. This year for example, using the short form for self employment (SA103S), I entered the cost of the cello in box 22 'Annual Investment Allowance.' Was that the correct place to put it or did it belong in box 24 'Other Capital Allowance'? I read the HMRC notes and box 22 seemed to make sense to me, but please let me know if I'm making a mistake. I only use this specific Cello for business, so it would be 100% business use.
After entering it into box 22 and subtracting my net profit in box 20, it gives me a loss (as I don't earn very much). Can I carry both this loss and last year's loss forward to next year? Should I add them both up and put them in box 34 'Total loss to carry forward after all other set-offs' or do I only record this year's loss in this box of £499?'
Yes, add them up and carry forward. I haven't just got a copy of the short form so can't confirm the box numbers, but as you can read music, I'm confident you'll be alright. Have you thought of using the HMRC online software? There is no rush to file just yet.
Also, have you considered applying for Exception from Class 2 National Insurance? You may not wish to do so, depending on your age and number of years contributions made to date.
Let me know how you go on and I'll try to find a copy of the short tax return form. The boxes you're quoting don't appear to be the same as the guidance I am reading.
kind regards, Tim
If your annual income is below your tax free allowances then there's no need to claim for the instruments at all.
I'm looking at the copy short return now. Providing your net profit and all other taxable income from all sources, are below your personal tax free allowances (usually £7475) in the year, then there is no compulsion to claim the capital allowances at all.
There is no box to record the (disclaimed) capital expenditure so you would keep a record elsewhere of the cost of the two instruments, ready to include in the AIA box 22 at such time as you can make use of these allowances. EG. when your entire income for the year exceeds the personal tax free allowance.
If your entire income was below £6475 last year (without the cost of the piano), then simply adjust the brought forward profits in box 28 by excluding that cost now. You may write to HMRC telling them you have done this but don't expect to hear anything back.
Let me know how you go on or if I've not managed to make it very clear.
Hi Tim, Thank you very much for your kindness in looking it up and explaning it to me. You made it very clear and I feel a little foolish as I didn't realize that this wasn't necessary because I was well below the tax free allowance. At least I can bring them both forward and they could be very helpful next year.
You're very welcome. I do wish I had kept up the cornet, clarinet or any music as I seem to be surrounded by musical talent. http://www.youtube.com/watch?v=SvpZOfMJmE8
Anyway, you're leading the sing-along if we ever have a forum get together :o)
You're very welcome. I do wish I had kept up the cornet, clarinet or any music as I seem to be surrounded by musical talent. http://www.youtube.com/watch?v=SvpZOfMJmE8
Anyway, you're leading the sing-along if we ever have a forum get together :o)
kind regards, Tim
I've put new strings on the banjer (although that never makes a diffrence ), and dusted off the concertina. Who's got the spoons?
Thanks again!
