So, you’ve taken the plunge and decided you’re going it alone, you’ve read our first blog here, and want to consider how you may be able to use losses if you’re a sole trader. Let’s talk you through a case study.
We recently took on a client who was trading as a sole trader. Let’s call her Mary.
Mary was in her second year of trading and had been set up as a sole trader. She had completed her self-assessment by herself to save her money in the first year, and then when she came to do the second year decided to enlist help from us as she had better things to spend her time doing.
Mary was working full time and getting the business set up in the background. The business required a lot of capital investment upfront, and big initial trading costs, which resulted in the business making a loss. With a claim for capital allowances, and a sideways loss relief claim and a carry back loss relief claim, we managed to secure a refund of £7k for the client! When she wasn’t expecting a penny!
Sometimes it pays to have an accountant and tax advisor to consider the potential loss reliefs, and additional claims that may well return some money back in your pocket.
If you expect to make initial losses in the set up of your business, being a sole trader creates a huge flexibility in how to utilise those losses.
If you’re a sole trader, and have made a loss, and want us to check over your returns to see if you could’ve been entitled to a refund too, get in touch with Bev on Bev@vibrantaccountancy.co.uk or call 01332 460184.
If you want to talk about it in more detail, we’d be happy to support and guide you through the best structure for you. Say hello to Bev or Ian at firstname.lastname@example.org or give us a buzz on 01332 460814.