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Posted Fri, 28 Jan 2022 22:21:24 GMT by HKL91
Hi, I started a little hobby business selling crafts on Etsy in March last year. I'm coming up close to my £1000 personal trading allowance for 2021/2022 but i've been offering free delivery for all my sales and paying for the postage out of my total sales cost. Can I deduct the postage costs or do I have to include this as net turnover due to offering free delivery? Also - my equipment was bought in the 2020/2021 tax year but I only made 2 sales so technically made a big loss - can this be carried over to 2021/2022 as expenses? I think I need to work out whether to claim partial relief with the personal trading allowance or to claim expenses instead thanks for any wise words of wisdom!
Posted Mon, 31 Jan 2022 16:26:38 GMT by HMRC Admin 2
Hi,

You can claim this as an expense but only if you report the income through Self Assessment. The £1000 allowance only applies to income before expenses.

If you have made a loss and would like to utilise this in the future, you will need to report this on the return in the first instance.

You can find guidance regarding losses here:

Relief for trading losses (Self Assessment helpsheet HS227)

Thank you.

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