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A bit of Accountancy advice please!
joeblack066
Posts: 1,757 Forumite
in Cutting tax
I am a self employed sole trader. One of the contracts that I work on pays me £70, clearly split on our contract as £50 paid for the service, plus £20 expenses regardless of distance travelled or any other expenses. Do you think that HMRC will accept this, ie do I pay tax on the £50, or do you think they will find it unacceptable and I will have to pay tax on the whole amount? Thx!
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Comments
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You pay tax only on your profits, which is income less your expenses. So lets say you have income of £70, but actual expenses are only £10, you will pay tax on £60. The expenses you are recovering from your client is still treated as income, but you deduct your actual expenses incurred off your income.0
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Thats great thanks I'm clear now! Seems obvious when you put it like that but for some reason it has been confusing the life out of me lol! Thx guys!0
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