Working out profits, losses and capital allowances

Updated on 9 September 2020

Self-employment

These pages provide you with the information to let you work out your taxable profits or losses if you are self-employed.

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What information and help can I find in these pages?

In these pages, we provide information and help which we hope will enable you to prepare your own accounts and work out your taxable profits.

In particular, we provide information on the following areas of taxation for the self-employed:

In the relevant areas of these pages we have explained the tax treatment for income and expenses which have arisen because of the coronavirus outbreak (COVID-19). You may also find the information in our coronavirus guidance section helpful.

Where can I get more help?

Our guide to self-employment is intended to supplement the material in this section. We wrote this guide to help advisers (non-tax) who advise low-income self-employed individuals and also for self-employed people who want more detailed information in one accessible place. The guide explains the less common tax rules and contains more detailed information including a case study showing how to prepare accounts and what to include on your tax return such as how to treat pre-trade expenses and using the cash basis.

If you have come from abroad to work in the UK, we suggest you also visit our migrants section.

If you are unhappy with the way in which you have been treated by HMRC, you may be able to make a complaint.

HMRC manage the UK tax system. You can find their contact details on GOV.UK.

HMRC have e-learning packages available online for the self-employed and also run regular webinars that you can join and which cover various topics such as business expenses, capital allowances, etc. More details and dates can be found on GOV.UK.

You can find out where to get help from third-party organisations in our getting help section.

Business records

Work out taxable profits

More information on self-employment
Am I employed, self-employed or neither?

What tax allowances am I entitled to?

How do I register for tax and National Insurance?

What is the trading allowance?

What business records should I keep?

How do I pay tax on self-employed income?

Working out profits, losses and capital allowances

What National Insurance do I pay if I am self-employed?

How do I work out my taxable profits?

What is the Construction Industry Scheme (CIS)?

How do I prepare my accounts?

How do I work out my profits for universal credit?

What business expenses are allowable?

Do I have to pay VAT if I am self-employed?

Can I claim for pre-trade expenses?

What is Making Tax Digital for VAT?

What capital allowances can I claim?

Pensions and self-employment

What if I make a loss?

How do I repay my student loan if I am self-employed?

When do I make Self Assessment payments and file my tax return?

Penalties and enquiries

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