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I will never understand tax, can anyone help me with a quick rough question, I'm self employed and had expenses of £3332, how much of this can I claim of, take of my tax bill, thank you
Best ask an accountant!
In theory all of it but it depends on what those expenses are as there are limits on how much is allowable to claim for different types of things
often accountants will do a free consultation - if your details are low end of the scale they won't necessarily want your custom on a long term basis.
There are HMRC guidelines on expenses, also working from home guides, usually (but not exclusively) entertaining is a no-no, capital stuff is OK, sundries or professional expenses OK..
fuel costs - or claim mileage. if stuff that is also shared for home use you need to apportion the share.
But, check HMRC site for guidance.
Fuel, vehicle running costs, tools, PPE, phone, mostly, it's just that from what I can see and I'm a bit of a thicko with numbers, what I have to pay looks like I have had nothing deducted for any of this. I am goin to phone HMRC before I phone my accountant but am just trying to find out a bit.
Thought this was the Bike Forum 😯
^ accountant. While they do cost money, they can save you a fair bit more and advise things you'd never think of. They can do your tax return for you also.
And yes, all depends what the expenses are. Some things you can claim, some you can't. Also some things you may be able to claim but there's a later impact on personal tax if that expense is not purely for business use.
Sounds like you need an accountant. If you don't understand this stuff, then you need to engage the services of someone who does.
Your expenses aren't subtracted from your tax bill. You basically add all you income, subtract all your allowable expenses and you taxed on what's left.
I thought I had posted this on chat, oops. I have an accountant but before I phone up I am trying to find some info my self.
Sales - material etc = gross profit
Gross profit - expenses = nett profit
Nett profit is what your tax is calculated on. ( (nett profit - tax code allowance) x 20% should give you a ball park figure then add about 8% for national insurance)
[i]I have an accountant but before I phone up I am trying to find some info my self. [/i]
Sounds like you have a dog and you're barking yourself 🙂
Fuel, vehicle running costs, tools, PPE, phone
Is your vehicle for work only? What is your annual mileage, You might be better off retaining it as your own vehicle and claiming the mileage at 45p a mile as expenses (you can't do this AND subtract lease/fuel costs as an expense)
Phone, is it work only, or personal as well, if both you need to claim proportionately.
PPE should be fine.
Are you just self employed, or a main job as well? 3k expenses sounds very low!
I'm a sole trader and got to do my return soon. I was wondering about car and phone, which I obviously use for both. But how much to claim for? I'd still have a phone if I wasn't self-employed, but I wouldn't have a car...
I'm freelance using my own Ltd company and I buy stuff like phones through the company. I just use them on PAYG and top up using the company credit card. No expenses to claim and being PAYG there's no arguing through bills over what is personal or not. If I was to pay any expense myself, I'd claim back from my company but then along comes the P11D each year and I then have to specify how much I use for my own use or not. Technically I should do the same even if the company buys the phone but I use it for personal use.
In general using a Ltd company I try to keep all company expenses separated from personal.
OP, if all those expenses are business related you can set them against your income - so you save the tax you would pay on your top £3k of income.
I'm a sole trader and got to do my return soon. I was wondering about car and phone, which I obviously use for both. But how much to claim for? I'd still have a phone if I wasn't self-employed, but I wouldn't have a car...
There are pretty helpful pages on the HMRC website jambourgle. I think sometimes, people reckon it'll be unnavigable and unhelpful, but they really have improved things over the last few years. As far as your car is concerned, have you recorded business v private mileage? If so, then [url= https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles- ]this page[/url] gives you an indication of how to claim. If you haven't recorded business mileage, then work out a percentage of time you use your vehicle for work/home. Add up all your motor expenses and multiply by this percentage. You could chance claiming for it all, but you'd have to be able to show that it's something that never gets used privately...in case you get an inspection. Our last accountants claimed for 5/7 of our car which we've reduced to 4/7 as the car has been used less; it was used by mrs deadly for work Mon-Fri, and by us at weekends.
Mobile phones are a bit more complicated - I think the taxman accepts now that most people have fixed contract costs for the phone whether they get used for private calls/texts or not. So, you could claim for 5/7 of that I guess. But you [i]should[/i] check this with an accountant or someone who knows better.