Running a hobby as a profit or loss making business?

I

Icarus

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I have a hobby that is stepping up into being a bit of a mini business. Does anyone have any similar experiences?

My passion is for all things food and I've started a website as a resource and portal for like minded people. I'd like to do it properly and give it what it really needs the problem is that this takes cash. I don't mind spending it but would like to find a way to get the most out of it by possibly getting a vat number etc.

Is there any legal template or structure for "professional hobbies" or business models that don't need to make profit?
 
As far as I am aware your sole trader losses are not reckonable against your main income for tax.
 
Hi extopia,

I am not an expert, but I understood that your trading losses can be offset against your income from all other sources in the same year.

So if I am a self-employed shopkeeper and make a loss of €20k I can set it against my paye income of €50k, and so only pay tax on €30k.

However, I think it is a requirement that the trade must be carried out with a view to making a profit. If the Revenue judge that it is only being carried out to fund a hobby, then the losses would not be claimable.

Brendan
 
Brendan said:
Hi extopia,

I am not an expert, but I understood that your trading losses can be offset against your income from all other sources in the same year.

So if I am a self-employed shopkeeper and make a loss of €20k I can set it against my paye income of €50k, and so only pay tax on €30k.

However, I think it is a requirement that the trade must be carried out with a view to making a profit. If the Revenue judge that it is only being carried out to fund a hobby, then the losses would not be claimable.

Brendan
Click to expand...

I'm I right in presuming that this is the case because our shopkeeper makes his €20k loss as a sole trader and not a ltd. company?
 
If a company makes a loss, it cannot be used outside the company.

If a sole trader makes a loss, I believe that it can be used against his other income

Brendan
 
Not particularly helpful but FYI I believe in the USA, if a business does not make a profit within 3 years, it is classified as a hobby.
 
Icarus, just out of curiousity (cause I'm nosey!) is the website up and running yet? Don't think it's against the rules to post the url here if ye want to point me in the right direction?
 
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