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Newsletter June 2018

Tax Tips - June 2018

Question: I am hoping to start my own business very soon, but I am not sure whether I should incorporate straight away or not. The business will require a capital cash investment, so it is likely that it will make a loss in the first, and maybe even second year of trading. Due to the loss relief rules is it better to be a sole trader or a limited company in the early years of trading?

Answer: There are of course, various advantages and disadvantages of incorporating a business. You will need to weigh everything up and may come to the conclusion that you’re best to carry on your business as a sole trader in the early years. This situation may be particularly relevant if you envisage making losses in the early years of trading, because you can carry back losses made in the first four years against personal income of the three preceding years, often resulting in a refund of tax becoming due. However, don’t miss out on the opportunity of forming a limited company later on when the benefits of company status may be more valuable.

Question: I am thinking of buying a property in England to rent out. Will I be able to offset the legal fees, stamp duty land tax, and deposit costs against the rental income I hope to receive?

Answer: The three items you mention relate to the actual purchase of the property, rather than to renting it out. The costs are considered as “capital expenditure” and cannot be claimed on your first tax return for the rental property to offset against rental income. However, do keep a note of these costs, because you will be able to claim for them for capital gains tax purposes, if and when you eventually come to sell the property.

We would suggest you always seek professional advice and we could assist with these matters.


1 June 2018- Due date for Corporation tax for companies with an accounting period ended 31 August 2017.

7 June 2018- Due date for filing and payment of VAT for the period ended 30 April 2018, unless you submit a paper return then the date is 31 May 2018.

Monthly Dates:

19th of the Month:

Due date for postal payments of PAYE, NIC and CIS deductions and on-line filing deadline for CIS300 monthly return to HMRC.

22nd of the Month:

Due date for electronic payments of PAYE, NIC and CIS deductions to HMRC.