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Posted Thu, 26 Jan 2023 16:38:50 GMT by Lisa Wilcox
I was employed for 9 months of 21-22 tax year, then spent a large amount of my earnings setting up my self employed business from home (physical changes to my home and garden to enable new business to start). My question is, can I offset these costs against my earnings from when I was employed as it’s in the same tax year
Posted Mon, 30 Jan 2023 15:28:16 GMT by HMRC Admin 5

No. The expenses incurred in setting up your self employment business, can only be set against the turnover from the self employment business, once the business has started trading.  

BIM46351 advises that certain cost incurred in setting up the business can be set against the trading income, once the business commences trading, providing they meet the 'wholly and exclusively' test.  

You can find more here:

BIM46351 - Specific deductions: pre-trading expenditure: scope

Additional guidance on expenses and the self employed can be found here:

Expenses if you're self-employed

Thank you.

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