what can be tax deductable...

[mickmcc]

Hi all, just wondering what exactly everybody claims back from the taxman, just to make sure all use newbies to the trade are getting the most out of it . p.s. as im thinking of taking the wife out for meals everyday and claiming on that haha, joke!!! But I am thinking about sponsoring a football team ie strips etc for advertising purposes guessing this would be ok, could be a good post if everyone gets involved. Thanks a bunch.
mick@tile-smart.northeast.

[GazTech]

Originally Posted by mickmcc

Hi all, just wondering what exactly everybody claims back from the taxman, just to make sure all use newbies to the trade are getting the most out of it . p.s. as im thinking of taking the wife out for meals everyday and claiming on that haha, joke!!! But I am thinking about sponsoring a football team ie strips etc for advertising purposes guessing this would be ok, could be a good post if everyone gets involved. Thanks a bunch.
mick@tile-smart.northeast.

grumpygrouter is your man to ask...he knows how the books should be cooked....Gaz

[grumpygrouter]

Originally Posted by Gaz @ Topps

grumpygrouter is your man to ask...he knows how the books should be cooked....Gaz

That me called Chef Grumpy now is it?

Grumpy

[Holohana]

i simply claim back everything that is a cost to the business be it fuel, tools, materials, clothes, stationary, staff (wife doing the books!), costs agisnt the home as i use it to run the bsiness, mobile phone & broadband, and any marketing costs such as advertising, business cards, flyers and sponsorship etc. This also includes any accomodation costs should you be working away and food allowance etc.

Of course the van goes against this as well, depreciation wise of course.

I then give it all to the accountant and then he works out whats ok and what isnt.

If its as legitimate expense then it should be claimable and offset against your tax, simple as that.

Have i missed or added andything i shouldnt have Grumpy?

[tysfoot]

i'm going to register as self employed in march and i didnt know you can claim so much back do you get this back at the end of the tax year in a lump sum. out of interest how much do accountants charge roughly.

So if i go self employed and i buy a 2 grand van i can claim that back ?

[grumpygrouter]

Originally Posted by Holohana

i simply claim back everything that is a cost to the business be it fuel, tools, materials, clothes, stationary, staff (wife doing the books!), costs agisnt the home as i use it to run the bsiness, mobile phone & broadband, and any marketing costs such as advertising, business cards, flyers and sponsorship etc. This also includes any accomodation costs should you be working away and food allowance etc.

Of course the van goes against this as well, depreciation wise of course.

I then give it all to the accountant and then he works out whats ok and what isnt.

If its as legitimate expense then it should be claimable and offset against your tax, simple as that.

Have i missed or added andything i shouldnt have Grumpy?

If you are paying your wife, ensure that you have registered with HMRC as an employer and you pay at least the National Minimum Wage, oh! and holiday pay!

Basically, anything that can be justified as WHOLLY AND ENTIRELY BUSINESS USE can be claimed against your tax bill. If you use things for personal use also, you must apportion the cost appropriately between business and personal.

Grumpy

[tysfoot]

Thats a lot more than i knew, i need to phone hmrc soon about this but i didnt know you can claim back agianst so much. it must be so much more worth while being self employed, up to now ive been doing cheap jobs and ive forked out so much in expenses

[grumpygrouter]

Originally Posted by tysfoot

i'm going to register as self employed in march and i didnt know you can claim so much back do you get this back at the end of the tax year in a lump sum. out of interest how much do accountants charge roughly.

So if i go self employed and i buy a 2 grand van i can claim that back ?

Hi Tysfoot,

You don't actually "Claim" anything back as such, what you do (in very basic terms) is prepare accounts showing how much you have earned, what you have spent and you deduct one from the other to give you a "profit". This profit is then the basis for your tax calculation.

Incidently vans are classed as "Fixed Assets" and are not directly tax deductable. What you do however, is claim a "capital allowance" against your fixed assets on your tax return. For instance if you spend £2000 on a van, you would be able to claim against your tax bill £500 in the first year (25%), then 25% of the reduced balance of £1500 in the second year i.e. £375, and so on.

As for accountants charges, how long is a piece of string? Go to the likes of Price Waterhouse Coopers and you may well pay all your profit to them!!! If you use a smaller practise the fees vary so much you will need to get meeting to get an idea of the what they would charge.

Grumpy

[tysfoot]

Thanks for the advice mate, its hard to take in all at once, im sure when people explain in about 100 different ways ill get it, ill understand more when i go through the process myself, thanks anyway

[sean384]

Im also going alone in March and that made some pretty usefull reading. Thanx Boys n Girls

[grumpygrouter]

You don't have to wait until you have finished working in your present job to be self employed, you can register anytime if you are doing work that generates income.

Indeed, if you are doing work outside your employment, you SHOULD be registered as under current legislation if you earn money, by whatever method, you should declare it on a tax return if it is not already taxed at source. This is stipulated under the Incomes and Corporations Taxes Act, and the Revenue don't even have to ask you, for you to be breaking the law!

Don't want anybody to be under any illusions that "if they don't know, it doesn't matter". I feel it is prudent to let anybody who is doing this "on the side" know what they are doing, legally.

Cautiously yours

Grumpy
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Just thought I would give so indicators of what can be claimed against your tax. This is from HMRC website

Decision Makers Guide - DMG35003

Allowable business expenses

Expenses which the decision maker should allow if the conditions in DMG35002 are met are all day-to-day expenses of a business including

• accountancy charges

• advertising

• cleaning of business premises

• difference between opening and closing stock (on accounts)

• discounts allowed to customers

• employees' wages before any deductions are made, including any wages payable to the domestic partner

• employer's contributions to employees' pension scheme

• employer's (secondary) Class 1 SS contributions

• heating and lighting (but see DMG35104)

• hire or rental costs (but not any capital or purchase elements - see DMG35104)

• interest payable under a credit sale, a consumer credit agreement or a hire purchase agreement (but not the capital element of payments - see DMG35019)

• legal fees associated with the business

• payment in kind for work done for the business - the monetary value is allowable

• rent and rates

• stationery

• stock purchases

• sundries, sometimes called miscellaneous items, which are small in relation to total allowable expenses provided that the decision maker is satisfied that no non-allowable expenses, for example for business entertainment, are included

• telephone, telex, fax etc (but see DMG35009)

• transport excluding any home-to-work costs - see also DMG35009 if a vehicle is used partly for private purposes

• VAT allowable (DMG31413).

Grumpy

[frogeye]

Having just registered a few days ago - I would like to give fair dues to HMRC - the whole process took less than 20 minutes on the phone ( very helpful ), I was offered further free help in the form of lectures etc - not as detailed as grumpy's no doubt, but good non the less I'm sure.

You have 3 months from the day you start being a 'sole trader' or self employed to telling HMRC. You can't register in advance - I found that out.

Make a loss - tools, expenses etc and it will be offset against your tax bill on earnings from other sources - other income or pensions etc. Seems reasonable to me. I will be looking for a good book-keeper.
frogeye