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Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2429
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I have a successful self employment and pay the tax due. I

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I have a successful self employment and pay the tax due. I started a company separate from this with a friend in the 2007 2008 tax year and I have spent about £6,000, initially thinking it would be a Director's loan. It is unlikely this company will ever obtain any income, so my question is, "am I able to set the £6,000 expenditure against my self-employed income or not? My total self employment income is just over £30,000 in the 2007 2008 tax year.
Submitted: 8 years ago.
Category: Tax
Expert:  Anne replied 8 years ago.



Thank you for using justanswer. For all practical purposes, your answer is no. Even if your current business was closely related in nature to the business that you invested in and that never really got off the ground, you would still have to be able to document that it was the business, not you personally, that made the business investment and making this type of an investment would be a normal part of your business's activities.


US tax law allows a person to take either a personal bad debt or a business bad debt in these types of situations, assuming that it meets all of the qualifiers. I notice you mention your money in terms of pounds, so I'm pretty sure you're not in the US.


I would suggest that you find a professional tax pro, Enrolled Agent, or CPA in your home town and let them give you some guidance on how best to recoup what ever % you can based on the tax laws of where you live.


I hope this helps


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