If I run a website that costs me more money than it makes me, where do I stand legally?
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If I run a website that costs me more money than it makes me, where do I stand legally?
No legal aspects to consider.
Simple on your tax return you place all losses againist all profits.

I would imagine you would use a short tax return which will take minutes.
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It depends on whether you have a limited company and incur costs from suppliers or other parties which you as the director know there is no reasonable chance of paying. As a sole trader or in a partnership different rules apply but there are definately legal issues to conside around trading insolvently if you operate through a Ltd Co.
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It depends on whether you have a limited company and incur costs from suppliers or other parties which you as the director know there is no reasonable chance of paying. As a sole trader or in a partnership different rules apply but there are definately legal issues to conside around trading insolvently if you operate through a Ltd Co.

Very good call did not think about ltd company,however sole trader very straight forward.

Even still as a ltd company a good accountant will sort this for you
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Thanks for the advice so far. I would be operating as a sole trader.
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Are you running the website as a business or for personal use?

If for business purposes are you registred as self employed?

If registered as self employed then simply put the cost of hosting and design and maintance through the tax return.


If personal then simply absorb the cost no problems.
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I looked into registering as self employed and they wanted me to pay ?/week for the privelige - I'm already losing money running the web site
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I looked into registering as self employed and they wanted me to pay ?/week for the privelige - I'm already losing money running the web site

If your profits are below c.?000 for the year you apply for a small earnings exception. This exempts you from the Class 2 NI which is the ?.20 a week.

You do this when you register as self employed.

If you are earning any money as a sole trader you are legally obliged to register with HMRC.
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Thank you for all the advice.
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You need to register with HMRC within 3 months or face a possible 100 penalty, registering is fairly easy, 3 options.. telephone 0845 9154515, register online http://hmrc.gov.uk/selfemployed and select register as self employed, or download & post the form cwf1 linked here http://www.hmrc.gov.uk/forms/cwf1.pdf

As advised you can apply for small earnings exception for NI if estimated income is less than 4,825 for the tax year april 08-09
The process for low income is straight forward for tax return, basically if your turnover is under ?5,000 you only need to fill in figures for turnover, expenses and profits, takes but 5 minutes of your time :)
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Once registered, you will be allowed to off set any losses made against other income which is taxable, thus reducing tax you pay, not a lot I know but better than nothing.
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Will this not look like tax evasion?
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No, quite legal as long as you register yourself.
If it looks as if you will make a loss you register for a small earnings exception certificate. This allows you, if you run a partime business at a loss, to claim the tax ammount on your loss from the tax you pay on your full time work.
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