sole trader expenses???

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manhattan
manhattan Posts: 1,461 Forumite
Uniform Washer
in Small biz MoneySaving
hi everyone,
i am about too venture on my own in the next few months and have a few questions.

i have purchased a few items/tools from a trade place and have reciepts,can i claim anything back from these when i get started even though i purchased them before i have started working for myself?(i dont think i will be vat registered)


some of the reciepts have my name on them and some have my company name will this cause any problems with claiming anything in the future?

also can i claim anything back on a van i will be buying in the near future?

many thanks in advance!

i have a few more questions but theres enough here for now! lol

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  • Trow
    Trow Posts: 2,298 Forumite
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    You can claim expenses against tax incurred up to three years prior to commencement - they are taken into account as if they were purchased on the first day or trading.

    Invoices - as a sole trader it is not crucial that invoices are in the business name,
    your own name is acceptable as you and the business are effectively one and the same for tax purposes. It would be best if you did register for VAT to try and keep them in the name that you have the registration under as it *may* complicate things.

    The van will be claimable under 'capital allowances' which effectively means you can claim it back over a period of years - which is the same with all capital items you buy (effectively items that are likely to be used in your business for 2 years or more)- the current rate of capital allowances is 25% on a reducing balance basis - i.e 25% of 100% in teh first year, 25% of 75% in the second. You may also claim First Year Allowances on some capital items as it looks like you will be a small business, this is 40% of the cost for the year of purchase only.

    This is just a rough guide and I would advise you to look further into it in detail before claiming capital allowances etc, as the rules do vary.

    HTH
  • Bordera
    Bordera Posts: 307 Forumite
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    Wow Trow, how did you manage to come out with that at this time of night???

    Dont forget 100% first year allowance on some items, like computer equipment (if you already owned it before you started trading you can only get 100% of the market value of the computer at the time you begin using it for the business AND that will have to be restricted bu the personal use element, that is the proportion of time you ar using tit for personal use, like now for instance) Phew

    Bo's bible - save yourself £100 by making sure you tell the Inland Revenue that you are self employed within 3 months of starting to trade.

    Us tax bods are such a sad lot :D
  • Trow
    Trow Posts: 2,298 Forumite
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    The 100% on computer equipment stopped last March - although it is still going on 'energy saving plant and equipment'

    And yes - hands up to being sad - Friday night and discussing capital allowances... :/
  • Bordera
    Bordera Posts: 307 Forumite
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    Trow wrote:
    The 100% on computer equipment stopped last March - although it is still going on 'energy saving plant and equipment'

    And yes - hands up to being sad - Friday night and discussing capital allowances... :/

    I'm ALWAYS a year behind. Ah well.
  • manhattan
    manhattan Posts: 1,461 Forumite
    Uniform Washer
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    thanks guys,thats quite interesting.

    can i register for vat even though i may not turn over 58k?

    is the 58k vat thing based on all income or just profit?(sorry if i sound stupid guys)but its all new to me! lol.
  • Trow
    Trow Posts: 2,298 Forumite
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    Hey, no problem - its great that you are asking because you'd be surprised by how many people *don't* ask before going into business!

    The 58k is your sales that would be subject to VAT (either standard rated or zero rated) - profit is irrelevant as far as VAT registration is concerned.

    You can register voluntarily for VAT if your turnover is under the threshold - whether or not you would want to depends on what you are doing - for example if your main customers are VAT registered businesses then it may well be in your interest, if you are selling to Jow Bloggs then you might be better not to - ask you can be more cost effective if you don't have to add VAT on to your prices.

    Something else to consider is whether your supplies are exempt - if so you may not be elegible to register.

    VAT is a complex beast so it is very hard to give a specific answer without more specific details.
  • manhattan
    manhattan Posts: 1,461 Forumite
    Uniform Washer
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    thanks trow,
    my business is going to be digital tv installation and servicing(analogue switchoff not too far away) ,mainly to the public so i would have thought not being vat registered would be better for me as i can charge less than the competition(most are vat registered).the thing is i am charged vat on my supplies/tools and van so i think i would loose out there?

    also there maybe a commercial contract in the pipline which may put me over the 58k limit.

    regards.
  • Finishrich
    Finishrich Posts: 1,038 Forumite
    First Anniversary Combo Breaker First Post PPI Party Pooper
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    manhattan wrote:
    also there maybe a commercial contract in the pipline which may put me over the 58k limit.

    regards.

    Well in that case you would need to be VAT registered.
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