The Business Hobby Tripwire
If the tax man comes out to talk to you, you can bet he wants money from you some way or other. An easy one for him is where a side business or hobby (e.g. farming or taxi business) is losing money every year and the loss can be set against your PAYE income. Now the rule is, after 3 years if no profit happens he call it a hobby whether you like it or not and disallows the losses.
There is the odd loophole, but he above is the crux of it.
In the meantime though, look around you. If there is a business you operate on a part time basis, then by keeping track of what you are spending, if it’s a loss then your overall income is less and your tax bill is less. I am a big fan of the quickbooks program and this is where it comes into it’s own. It’s just so much easier for keeping track.
Typical hobby businesses are:
- farming a few cattle
- website building
- marketing services
- painting art
but really the list goes on and on
Any questions on this matter, just Contact me Here and I’ll respond within 24 hours or Freefone on 1 800 476 984