Tax Question

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jackbrazzo
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Tax Question

Post by jackbrazzo » Sun Jun 10, 2012 6:41 am

Guys

I have recently sorted out my tax for this year. Basically next year I aim to negate more tax but buying more gear to claim back as a capital expenditure (basically i dont really want to be paying tax if I dont have too!)

Quite legitimately I can do this. DJing is a side project for me as I work in IT in the city. Does anyone know if there is an upper limit or ceiling on what you can claim back? For arguments sake lets say I earning 5K GBP and i bought an Apple Mac Laptop, Oto Biscuit, 2 analogue synths and it all came at over 5K would i be liable for no tax. I see this venture purely for fun and an opportunity to buy music gear. Other than playing class 2 NI would that be my only financial liability?

Cheers

Dal-Tech
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Re: Tax Question

Post by Dal-Tech » Mon Jun 11, 2012 8:20 am

I know in the States it has to be for a legit business. You can't just can't go on a spending spree making 0 money from it. If you're DJing on the side and getting payed you should be okay. Check with a tax advisor, Good luck.
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John Clees
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Re: Tax Question

Post by John Clees » Mon Jun 11, 2012 10:58 pm

Dal-Tech wrote:I know in the States it has to be for a legit business.
every business has to start somewhere..

I've personally done this, and have tripled by return claiming things.. * also it helps by having a regular day job and income as well...

fact is most business fail within the first 3 years, and therefore you can show a loss for about 3 years before anything is every really raised or flagged. here in the states its highly encouraged to open your own business.. I've just learned a lot doing what I did the past few years... ended up filing chp 7, and now have over 700 scores two years later..

even putting a magnet on your car, of your business name, your allowed to write off a portion of gas, payments & insurance. also this could apply to having a desk/office at your living space, writing of utilities and also a portion off your rent.. even a standard H&R block account can help you with this....paying personal cpa isn't necessary..

perhaps try doing some parties, where their is some income level shown, not just buying equipment for producing ... this way you will have some income ...

but yes, I've done this, took a rest, and may do it all over again even with the same name..

great question :!:

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Re: Tax Question

Post by Dal-Tech » Sat Jun 16, 2012 9:06 am

john clees, I think you could get into trouble. Even though they allow you three years to turn a profit it has to look like your were trying to turn a profit. The reason for this is anyone could cheat the system claiming they had a business when in actuality they were just trying to get huge discounts on stuff.
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Re: Tax Question

Post by jackbrazzo » Sun Jun 17, 2012 11:58 am

The issue is a bit cloudy but my understanding is this that you can claim on capital expenditure - I am going to find out what the limits are. As John alluded to you are FULLY entitled to claim part of your rent, bills etc against the income. If anyone wants any more info let me know. Its the first time I have done it. While its a drag its certainly an interesting field on what to claim and what not to claim.

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Re: Tax Question

Post by Dardis » Mon Jun 18, 2012 12:16 am

I'd double check this, but I think you can claim a 100% allowance on capital expenditure up to £25,000 in the UK. Anything over this is handled on a written down allowance basis at 20% (soon to be 18%).

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Re: Tax Question

Post by John Clees » Mon Jun 25, 2012 11:00 am

also if your business survives, especially this hard economic turn.... you would would potentially someday have employee's as well.. helping your own community. so it is encouraged to take chances...

I think for the initial topic at hand, just to buy equipment and such, claiming part of your rent ect....is a bit of a stretch.... unless you have consistent income..

but buying things, attempting to throw events, and letting it dissolve a year or two later... shouldn't be an issue at all.

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Re: Tax Question

Post by Dal-Tech » Sat Aug 04, 2012 12:23 pm

If you live in the US chek out:

http://www.irs.gov/publications/p535/ch01.html

Introduction

This chapter covers the general rules for deducting business expenses. Business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit.

Topics - This chapter discusses:

What you can deduct

How much you can deduct

When you can deduct

Not-for-profit activities
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