A few questions about self-assessment

mancbird

Hi everyone,

I would be very grateful if anyone could help me (or point me in the right direction) regarding a few queries about filling in my self-assessment online.

I am employed full time and pay tax and NI through PAYE. I don't earn anywhere near the higher taxpayer rate for this employment.

During the year 07/08 I also began working as self-employed so I now need to fill in a self-assessment. For my self-employed business I earned just over £1,700 before any deductions, expenses etc are taken off.

Here are my questions:

• In order to set up my self-employed business I had to purchase a franchise. The fee for this was £500. Am I right in thinking that I can claim 50% of this cost as a capital cost in my business expenses this year and then 25% for the next 2 years?
• For my self-employed business I worked from home. Am I right in thinking I can claim a portion of my heating, electricity costs etc? If so, how do I work this out?
• Business mileage can be claimed at 40p per mile. Is this correct?
• I had to have a mobile phone to carry out my work. I also used it for personal calls but had inclusive minutes which covered all of my calls made (both business and personal). Can any of this be claimed as expenses?
• Is there anything else I should be claiming as expenses that I have not mentioned?
• As I already pay National Insurance contributions through my full time job, will I also have to pay them on my self-employed earnings (which are quite small)?

I really would appreciate some advice as I am now completing this online and really can't afford an accountant. I've tried looking on HMRC's website but it's very confusing for someone who has never had to do this before!!!

Thanks in advance
x

fengirl_2

In reply to your questions:
1. Yes, but capital allowances will continue past 3 yrs until the cost of the franchise reduces to nil.
2, Yoou cannot claim anything, but you include costs in your accounts which reduce your tax bill. You need to include the proportion of your utilities in relation to the room occupied by the business, so if you have 5 rooms (excl kitchen and bathroom) and use one for business, you include one fifth of your bills. You should be including this in your book keeping as you go throughout the year,
3, Yes, up to 10,000 miles, then 25p pm.
4. You include all yur mobile phine costs and then make an adjustment for private calls - its up to you how much, but be prepared to justify this if asked.
5, Hard to advise without knowing what you do, but if you make a habit of keeping records of all business expenditure, you wont miss anything.
6, If your profit is under £5435, you are entitled to the small earnings exemption.

Why are you not making up your accounts for a whole year?

mancbird

fengirl wrote: »

In reply to your questions:
1. Yes, but capital allowances will continue past 3 yrs until the cost of the franchise reduces to nil.

Why are you not making up your accounts for a whole year?

Thanks Fengirl

I started trading in October 2007 and ceased in October 2008 so I'm doing my assessment for the period Oct 07 to Apr 08. Is this what I should be doing?

Also, as I ceased trading the cost of the franchise would be over two financial years as that's how long I traded for. When I ceased trading I did not get anything back for the franchise fee I had paid. So, would I put 50% in this year and 50% next year? I also bought another franchise in 08/09 so would that all go in next year's figures?

I'm very grateful for your help as I find this all rather confusing!