PAYE & Sole Trader

[captain-caveman]

Hi,

I have worked as an employee for a long time now, I have recently started up an additional business as a sole trader (3 months ago).

I have spent quite a bit starting the business up but it's starting to go well and I have quite a few customers.

My questions are:

- I think I can I offset the loss I have made against my PAYE tax? I pay 40%.
- Is there anything I need to consider?

On a side note, not something I am going to do but I was thinking what would stop someone who pays a lot of TAX in PAYE setting up a "business" as a sole trader and buying a top of the range car, computers etc for their "new business", making a loss and claiming it all back against their PAYE?

Thanks.

 

[talkinpeace]

On the page I wrote for ebayers
http://cgi3.ebay.co.uk/ws/eBayISAPI.dll?ViewUserPage&userid=talkinpeace
is lots of useful information including the link to this
http://cchweb.cch.co.uk/budget/budget2008/hmrc/bud08_note_63.htm
the bit that says, no you may not make an artificial loss

 

[captain-caveman]

On the page I wrote for ebayers

is lots of useful information including the link to this

the bit that says, no you may not make an artificial loss

Thanks for the links. So what I can gather from the links is provided you spend more than 10 hours per week and you are trading with the view that you will at some point make a profit then you are OK?