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Primble
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I haven't dealt with this before but recon someone on here has. Say Hubby sets up a business which is something to do with design or photography. In this example lets say he does photos for a wedding and gets £200 for doing it, if he then buys a new lense for the same amount or more does that mean he then doesn't pay tax or is the cost needing to be spread over so many years? I guess NI still needs paying but if it is more of a hobby business done alongside a full time job which he pays NI through does he still have to pay it on the self employed stuff?
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Comments
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On your example, no tax, the lens is a revenue not a capital expense (even though it will last more than a year it is under £300 which is the value at which I typically capitalise assets). If it's the only expense, then income £200, expenses £200, net profit nil. it's just simple small sole trader accounts.
No Class 2 NI because he can claim small earnings exception (earning under approx 5000 profit a year) and Class 4 is payable on profits over 6000-ish (can't be bothered to look up the exact rates, sorry!) so don't need to pay that either. Can pay Class 2 voluntarily if not getting NI credits anywhere else.
Income needs declaring on tax return even if its only a small scale business. Losses may be set against other income of same year (and if paying tax on that, pay get a rebate).0 -
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