tax expenses

lucid2008

I am self-employed and last summer i was working on this basis as a courier for a company who supplied me with a truck.One day i caught the roof of a filling station due to height confusion and had to pay a £1,200 from my own money.
The employer had led me to believe i would be on his public liabilty when in fact i needed my own.
Anyway can i send the £1,200 letter invoice i paid, to the tax office for some reduction on my tax bill in january when i fill it in online ?

colhun

If you believe your tax bill will be lower for 2008/2009, than the previous year, you can claim to reduce the payments on account that you will be due to make in January and July 2009. You will need to complete form SA303, on which you can state your reason as to why you think this to be the case. There is no need to submit invoices etc.

Be carefull not to reduce the payments too much, as if you do, interest will be charged on the shortfall of the tax due from the due date of payment.

trevormax

colhun wrote: »

If you believe your tax bill will be lower for 2008/2009, than the previous year, you can claim to reduce the payments on account that you will be due to make in January and July 2009. You will need to complete form SA303, on which you can state your reason as to why you think this to be the case. There is no need to submit invoices etc.

Be carefull not to reduce the payments too much, as if you do, interest will be charged on the shortfall of the tax due from the due date of payment.

This is not what the OP was asking about. He is asking if he can claim the payment he had to make as a result of the accident as an expense to reduce his tax bill.

I am not 100% sure as I have never come accross this before but I believe HMRC would try to dis-allow this as an expense. To claim an expense as a business expense while self employed, the expense needs to be wholly and exclusively for business purposes and paid to allow you to carry out your work.

HMRC will probably argue that had you not paid to fix the filling station, it would not have prevented you from carrying out your trade as a courier. If it had been your own vehicle, then you might have been able to claim repairs to the vehicle.

The expense was not to purchase items to carry out a job, or to repair plant or machinery that you owned which was needed to carry out your job. The money you paid was as a result of an accident you have caused while not propperly covered.

As this is knd of a gray area, you could try to put it as an expens and see how HMRC respond. They will process your return and may check it more at a later date. If you do this, you should be open and honest about it and not try to conceal anything. See if there is somewhere you can enter this on the return. If it does get provisionally accepted, the money that you save on your tax bill should be put to one side for a while in case HMRC decide it is not allowed and claim it, then at least you will have it available to pay.

july73

My husband is a self employed courier and I do all his vat returns and book keeping. I'm no expert though as we pay an accountant to make sure things are correct and in order etc. To many gray areas for me to confidently finalise his tax return.

Anyway to your question, I am sure you can claim. It will still be classed as a business expense. Some of the guys he works with who do have accountants also claim back for damage done to their vans, whether it be minor or due to an accident. If you have an invoice you should be able to claim. It will reduce your profitable pay they tax you on and not take the total amount of your tax bill. Hopefully you already know this but some people get mislead into thinking it will reduce their tax bill by £1,200. Just in case this was how you were thinking it would work.

I would give them a call if you don't have an accountant. They are going to be the ones who can give you a definite/correct answer to your question.
At least then you can sleep easy knowing you have claimed correctly. I have used them in the past when my husbands buisness was more simple and when he didn't have an accountant. It might supprise some, but they were very helpful.

july73

Sorry I may have just misread your post and based the fee being on your van. Should of guessed when you stated public liability insurance, that you were referring to the damage caused to the filling station:o
I think this may not be claimable, but worth asking HMRC and see, because it is technically to do with work. But as the previous poster stated, they may argue that you should of had public liability insurance. If you were mislead by your employer. Then it might be worth seeking legal advice.

mrkbrrws

For discussion only, my opinion is that the £1,200 is an allowable expense of the trade and should be deducted from your taxable profits.

Presumably this was either civil damages or a settlement, which http://www.hmrc.gov.uk/manuals/bimmanual/BIM38540.htm suggests would be allowable if they arise out of normal trading operations. Using a filling station is a normal part of courier operations, therefore the payment should be allowable.

lucid2008

Thanks for the comments.For the 2007/2008 tax year i suffered a lot with severe sciatica and only earned £7,183 as a single man and the online SA says i have to pay £352 total.
The invoice i had to pay from the garage was just over £1,100 so that came out of money i earned over that period so i cannot see why i should have to pay tax on money i earned that i had to pay out in expenses.
Thanks for all your help,i will try the SA helpline which always seems to be down.

lucid2008

A snotty woman on the phone from tax office said no chance.

Cook_County

If you did not already claim this as an expense you can repair the 2007/08 return at this stage.

You will then owe less tax & it will be up to HMRC to challenge at that stage if they audit the return.

lucid2008

It was july 2007.Thanks for your help jimmo.

Stuart_Bellamy

I also believe that you should be able to make a claim for the repair. I would suggest amending the 2007/08 return to include the expense and reduce your tax bill.

As Jimmo has said I wouldn't trust the advice given by someone at the tax office unless they could give supporting evidence of why it wasn't allowable