How do I work out expenses?

BubbleOfLife

I was looking on the HMRC for notes about working out expense but I don't see anything that included various expenses, i.e. telephone, electricity, stationary, etc. I have found noted mostly about working out the mileage.
I have a few notes of mine, but I want to know if anything has changed.

Does anyone know where I can find such information on the HMRC or other reliable source?

Thank you

Rolo_Tomasi

There is no list of expenses as they are different for every business/individual. If you are an employee then there is very little that can be offset against income. If you are self employed then you have to ask yourself....... would I have incurred the expense if I was not self employed? If the answer is no then it is likely to be allowable.

BubbleOfLife

jimmo wrote: »

Are your expenses related to employment, self-employment or perhaps property letting?

Expenses all related to self-employment (I'm Sole Trader not PAYE), e.g. postage, stationaries (pens, notebooks, files, paper for printing, sellotape, etc), ink for inkjet printer.
(I partly work from home. I have an idea about the costs for my electricity, gas & rent I can deduct.)

orangeslimes

BubbleOfLife wrote: »

Expenses all related to self-employment (I'm Sole Trader not PAYE), e.g. postage, stationaries (pens, notebooks, files, paper for printing, sellotape, etc), ink for inkjet printer.
(I partly work from home. I have an idea about the costs for my electricity, gas & rent I can deduct.)

Postage and stationery costs for your business you can definitely claim.

For working from home you need to think about how much you use your home for your business. E.g. if you have a house with 4 rooms and one of those you use primarily as an office then 1/4 of your costs might be acceptable. For costs you can include electricity, gas, council tax and rent.

Other likely costs are telephone and internet.

However it doesn't sound like to know what you are doing so it might be best to seek professional advice (i.e. an accountant)

BubbleOfLife

Ok, I think I got the gist.
Yes, I will go to an accountant for the next year because I've had enough of doing my own tax returns to save money as they do my head in, wasting a great deal of my time and energy every year. And I find it all so stressful that I don't bother claiming lots of things.

Thank you for your replies

the182guy

Sorry to hijack the thread.... Can I include the cost of a printer, even though I don't have the receipt? Also fuel @ £15/month without receipts?

fengirl_2

You can include the printer in your accounts (but treat as capital if over £100), but be prepared for HMRC to disallow it if you are investigated.
Instead of including actual car running costs, why not go for the 40p pm mile method? If you have a reasonable record of your busienss mileage you can include 40p pm for the first 10,000 miles and 25p pm thereafter.

the182guy

fengirl wrote: »

You can include the printer in your accounts (but treat as capital if over £100), but be prepared for HMRC to disallow it if you are investigated.
Instead of including actual car running costs, why not go for the 40p pm mile method? If you have a reasonable record of your busienss mileage you can include 40p pm for the first 10,000 miles and 25p pm thereafter.

Thanks fengirl, that helps.

Rolo_Tomasi

If you have used receipts to calculate your motoring expenses in previous years then you will have to continue using this method unless you have changed your vehicle. Also you can only use the mileage method if your turnover is below the VAT registration limit (about £68k).

If you do not have receipts then technically you cannot include the expense in your accounts. If you do and you are investigated then the Revenue may disallow the whole of the receipt. In practice this rarely happens as long as it is reasonable that you have incurred the expense and can prove it in some way - ie on a bank or credit card statement.

TM1976

From an accounting perspective your business accounts should be complete record of you trading activities and would be incorrect if they didn't include all you business expenditure receipted or not.

You don't have to produce receipts for tax purposes just a record of expenditure however bear in mind that the quality of your record will act for or against you should it be challenged by HMR&C.

For the example above the purchase of a printer could be included, this may not be receipted but it could be supported by other records eg. bank/credit card statements, however it need not be.

£15 a month for fuel could be included but I think it would be subject to s a degree of scrutiny if you had a tax inspection.