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Old 04.07.2012, 06:23
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tax man not chappy if you have zero sales first year?

Hi all,

would appreciate your thoughts on my scenario. I started up business last dec as a sole trader. My business is in science software for the mobile phone and internet. I have spent all the time since I started further developing my software and will only really will be able to have (and want to have) customers perhaps in November this year, but perhaps not until next year.

Perhaps I should have waited a year before starting my business until the software was developed, but by having an active business, this has let me build up a group of potential clients whom I am working with to make the software 'fully featured'. I also, as a one-off, was paid for by one client for an early version of my software (Dec last year).

My issue is though, will I get into trouble with the tax man for potentially having no sales this year? Having zero tax sense, this is a concern for me.

Many thanks,
Andy.
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Old 04.07.2012, 07:17
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Re: tax man not chappy if you have zero sales first year?

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Hi all,

would appreciate your thoughts on my scenario. I started up business last dec as a sole trader. My business is in science software for the mobile phone and internet. I have spent all the time since I started further developing my software and will only really will be able to have (and want to have) customers perhaps in November this year, but perhaps not until next year.

Perhaps I should have waited a year before starting my business until the software was developed, but by having an active business, this has let me build up a group of potential clients whom I am working with to make the software 'fully featured'. I also, as a one-off, was paid for by one client for an early version of my software (Dec last year).

My issue is though, will I get into trouble with the tax man for potentially having no sales this year? Having zero tax sense, this is a concern for me.

Many thanks,
Andy.
None whatsoever, you have plenty of developement costs and providing you can show a source of private income or savings whichg has allowed you to live, then zero sales in first year with high development costs are perfectly acceptable.
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Old 04.07.2012, 07:24
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Re: tax man not chappy if you have zero sales first year?

I don't think it will be a problem. They will ask questions but as long as you tell them the full version they will be happy enough.
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Old 04.07.2012, 07:32
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Re: tax man not chappy if you have zero sales first year?

As long as you have audited accounts, you are fully entitled to file for zero sales or even a loss, whatever the state of affairs are. Many companies have low net profits for example and pay their directors more as personal taxation levels are significantly lower than corporate taxes.

Sales and profits (aside from being your means of income) are only really of interest to banks or financial institutions who you may want to borrow money from or other entities who might be interested in purchasing your organization at some point in the future.
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Old 04.07.2012, 08:32
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Re: tax man not chappy if you have zero sales first year?

Thanks all
I've been diligent logging incoming and outgoing money in an excel sheet so I feel much reassured.
Cheers,
Andy.
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