2nd Tax Year - Claiming expenses for Materials not used from previous tax year

[brunette]

Hi!

I wonder if someone can answer this query for me.

If you deduct expenses for materials purchased in one tax year, but by the second tax year you have not used these materials - can they be deducted again? Alternatively, are expenses and profits from the previous tax year carried forward to the next tax year when calculating tax due?

I'm just a bit concerned that if I were to deduct the cost of all the materials I have purchased this year and next year I don't buy much (because i've got LOADS in stock at the moment) it may give a false impression of how much profit i have made....

Not sure if this makes much sense, but hopefully someone will get where I am coming from!!

Thanks everyone. :)

[Sparklez]

I'm sure someone will know, but I'd suggest phoning the tax office, they are really helpful and you've not got long to get your form in if you want them to do your calculations for you.

Carol

[Woodsprite]

Bit s late of an evening to try and think too clearly on this one but I think you need to swat up on opening and closing balances. Basically you need to do a stock take of all your stocks, work ot the value of what you have used in a particular tax year and declare this in your returns. The rest goes into next years returns as your opening balance - or something like that. So basically you claim in this year for what you've used in this year and carry forward to next year what you haven't used in this year. I'm sure there's probably an accountant lurking somewhere in the wings who can explain it much simpler though. Also check out BusinessLink for some worked examples of profit/loss accounts/etc. that cover this subject.

[MrSwirl]

Hi!

I wonder if someone can answer this query for me.

If you deduct expenses for materials purchased in one tax year, but by the second tax year you have not used these materials - can they be deducted again? Alternatively, are expenses and profits from the previous tax year carried forward to the next tax year when calculating tax due?

I'm just a bit concerned that if I were to deduct the cost of all the materials I have purchased this year and next year I don't buy much (because i've got LOADS in stock at the moment) it may give a false impression of how much profit i have made....

Not sure if this makes much sense, but hopefully someone will get where I am coming from!!

Thanks everyone. :)


No, you can't claim the costs again - if you could there would be no incentive to use them, since you could claim them forever!

If you haven't used them in the year when you expensed them, then it still gives an accurate picture of your profit over the two years.