Starting another business as self employed

[Thesearcher]

Two businesses: a profitable VAT-registered property rental and a new creative startup. I personally paid startup setup costs for the new business in 2024–2025 with no sales. This year, the product launched via a distributor, with a small royalty due later this year or next, but expenses far exceed revenue, creating a large loss. Next year, slightly bigger profits are expected. Can I offset my rental business’s tax bill this year with the startup’s full first-year loss (including past setup costs), or must older costs be reserved for future startup profits? Seeking different opinions before meeting an accountant.

I'm self employed at the moment and may use a company in the future. Does this situation differ with a company?

 

[Brendan Burgess]

I am not a tax expert so can't really give any sort of confident answer.

But for something like this, you should get tax advice in advance of setting up the new business. It's better later than never, so go see a tax advisor.

As I understand it, and I may be incorrect, you can set your losses on the business against your profits from your rentals in the same year.

I would also wonder at the wisdom of a "vat registered property rental". Did you get advice on structuring it this way.

I doubt that you could set losses as self-employed against profits in a company or vice versa.

 

[Thesearcher]

Thanks Brendan, I will get tax advice on this as it appears to be a bit of a minefield.
All the best