Whats allowable for tax puposes

katykitten

im starting a small business and would like to know of a good source of information for finding out what i can claim against my profits tax-wise - i have an accountant who will be sending in my tax return but i dont want to be trying to claim for things that are ridiculous and also dont want to miss out on things i could be claiming for
thanks

paulwf

Business Link has some info on this - check their site or give them a call. Details depend on whether you are sole trader or Ltd.

fengirl_2

You cannot claim for anything, but all yur business expenses need to be included in your records so that your accountant can include them in your accounts and reduce yoour tax bill.
Your accountant should be advising you on record keeping. If you have a separate bank account for business and put all your business income and expenditure throught that, you wont miss anything.
there is no list of allowable deductions as all businesses are different and run in different ways.

Snippa

Any expense incurred in the line of business is an expense you can claim. If you're working from home, you can partially claim things like electricity. The best way to think of it is like a set of accounts. You have income - what's coming in from the business. And expenses - what's going out in the line of the business. The difference is the profit.

So if, for example, you have to take a client out for lunch, that's allowable as an expense.

You can get some more idea here:

http://www.taxaid.org.uk/self_employ.cfm?secnav=6

Rolo_Tomasi

Snippa wrote: »

So if, for example, you have to take a client out for lunch, that's allowable as an expense.

Bad example I'm afraid as this type of expense is specifically not an allowable deduction.

As others have said there is no list - it depends on your specific circumstances. The Revenue generally rely on the term 'wholly, exclusively and necessarily' in determining whether or not tax relief is available on an expense. In English this means that all the expense is incurred just for the business. There are exceptions to this (as with the entertainment example above) but if you start by asking yourself "would I have spent this if I didn't run my own business" you shouldn't be too wrong.

fengirl_2

Just to correct what Rolo has said, the 'necesssary' test does not apply to self employed people. It's up to the individual business to decide what is necessary to run itself, eg one business may decide to advertise, another may not, this does not preclude the business which advertises from including these costs in its accounts.