Self Employed Builder Tax Help

Lukey_lukey

I've looked all over the web but just can't seem to find any info that isn't baffling me.
I'm a 23 year old self employed builder currently living at home with my parents. I'm on around £12,000 a year (Before tax)

My questions are:

1. I bought a car (cost £10000, paying £150 a month for it). I do about 9000 miles a year, 5000 of them being to and from my job plus trips to building depos.
Can I claim anything for the purchase of the car, insurace, tax etc? And can I claim for the petrol going to and from work as a builder? If so how do I go about claiming for a portion of my actual mileage?

2. I buy clothes for work, are these ALL claimable? Things like safety boots, gloves and various other items which are needed for work.

3. I got a contract phone costing me £35 a month. Can I claim anything of that? considering I don't own the landline in the house, or use it for anything work related.

4. I bought a laptop mainly for work related things but do use it for personal things too. Can I claim anything for that?

5. Is there anything else that's obvious I can claim for?

I've been told by so many different self employed people that I can claim for this and that but I'd rather learn from someone that really knows.
Any help would be great!!
Thanks:money:

fengirl_2

You cannot claim for anything. However, if you include all the expenses incurred in running your busines in your accounts at the end of the year, it will reduce the amount of tax you pay. In answer to your questions:
1. There are two ways to include the cost of running yuor vehicle in yur accounts:
(a) you simpley include 40p for every business mile you travel up to 10,000 miles pa and 25p per mile for every mile thereafter., or
(b) you include all the costs of running your car - fuel, tax, interest on loan, repairs, etc in your accounts. When you come to do your self assessment, you add back on the form the proportion of the costs which relate to your private mileage. In addition, you can claim capital allowances on the cost of the car on your tax return.
You can only use one method and you cannot change once you have decided and of course yu need to keep arecord of yur business mileage.
2. You can include the cost of any specialist workwear, but not things like jeans which you could wear out of work.
3. Again, include the whole lot and then add back on your return a proportion for privtae use - the proportion is up to you - anything reasonable will be accepted.
4. You can claim capital allowances for this, but you will restrict the amount to take account of privtae use.
5.If you keep an accurate record of everything you spend for work, yu shouldnt miss anything.
You might benefit from a word with someone at Business Link.

Rolo_Tomasi

Lukey_lukey wrote: »

I've been told by so many different self employed people that I can claim for this and that but I'd rather learn from someone that really knows.

How do you know that anyone who responds to this really knows - there will be no comeback on them if you act on their advice and it proves to be wrong. If you want to really know you should engage an accountant.

There is no definitive list of expenses you can set against your income for tax purposes - the expense has to be incurred wholly, exclusively and necessarily for business purposes. This means that items such as work boots, visi jackets, gloves etc will be fine but you cannot include you mobile if you do not use it in the business.

Your main expense will be for traveling to and from the sites where you are working and you have two options for this. Either include an amount based on the Revenues approved mileage rates - 40p per mile for the first 10,000 business miles and 25ppm for any excess - or keep a record of all of your motoring expenses and include the proportion of these which relate to your business travel. The second option means that you can also claim 'capital allowances' on the costs of the vehicle. Whichever option is best for you depends on your circumstances so you need to do the maths.

PlutoinCapricorn

Lukey, the angle to take is to list the things that you would not have bought if you did not have this business, and the things that you are using more of because of your business. Always bear in mind that you may be investigated and expected to produce receipts and evidence of business use. It is not a good idea to put in something just because other people do this: everyone's circmstances are different, which is why there is no definitive list.

For example, you will have a lot of travel costs as you do your work outside your home, but a home-based researcher who is online most of the time so can claim a higher proportion of electricity, internet etc but would not claim much in the way of travel costs.

You may need to split the money spent into expenses and capital items.

As others have said, www.businesslink.gov.uk are very useful: they even have free workshops for tax matters.

As others have said again, you can't claim back any business expenses,that is not how it works. You deduct the total amounts from your income to arrive at your profit, which is what you are taxed on. The effect is that everything costs you 20% less than you paid.

Lukey_lukey

Hey, thanks for your replys. I should of been more detailed.
I've been self employed for a few years now. I've done my accounts previously for 2 other years so I already know where to deduct the ammounts from and whatnot. It's just noone really likes paying tax and this year has been a tough one for me so I'm just trying to get my tax bill a little bit lower.
I've been told silly little things like about claiming lunch allowances, something like £2 per working day reguardless of having any receipt. I don't see why this would be true but it came from a "qualified" accountant who I know personally.

PlutoinCapricorn

That makes more sense now: there is nothing wrong with trying to get the tax payable down, but I can't see much scope. The Tax form and HMRC website do give some information about what you can and can't claim for, provided that the claimable items are relevant to the particular sole trader. As you are earning under a certain amount, you just give a total for the expenses and no details are required. I don't think that the meal allowance is relevant to you: I am afraid that some people do pile it on in the hope that they will get away with it and some accountants condone this.

As you live with your parents and work away from home most of the time, I don't see how you can get away with claiming electricity, water, council tax etc. as some people do. Cleaning your work clothes is a genuine expense.