Tax Return - Expenses

Marcos117

Hi,

I work full time as a Designer but also do freelance work on the side. I'm just doing my tax return and I'm not sure what I can claim as expenses.

I've put down business cards, web hosting and domain names which I assume is ok. I also purchased a new laptop last year and was wondering how much of it can put down as expenses. The laptop was £799 and it's used for business 50% of the time and personal use the other 50%.

There's also broadband but this is for personal use as well as business.

Thanks

fengirl_2

You need to ask the question, did I buy this in order to earn my fees as a designer. if the anser is yes, then it needs to be included in your accounts. All the items you mention are business expenses and need to be included, as well as an estimate of the business use proportion of the broadband connection.
You would claim capital allowances on the laptop, restriected to 50%.

Marcos117

Thanks fengirl,

Does that mean I put 50% of the cost of the laptop down as expenses?

Marcos117

Sorry I meant put 50% of the laptop cost as capital allowance?

fengirl_2

No, capital allowances are only 20%, so you claim 50% of 20% and carry the balance of the cost forward.

Pennywise

fengirl wrote: »

No, capital allowances are only 20%, so you claim 50% of 20% and carry the balance of the cost forward.

You'll be eligible for the 100% annual investment allowance not the basic 20% so YES, you can claim half the cost of the computer as a capital allowance for the year of purchase, but nothing else in future years.

Marcos117

Thanks, I get it now.

joanne_d_3

Pennywise wrote: »

You'll be eligible for the 100% annual investment allowance not the basic 20% so YES, you can claim half the cost of the computer as a capital allowance for the year of purchase, but nothing else in future years.

Pennywise.

You always give good advice.

My husband has just started out self employed as a taxi driver and thanks to the patience and advice of the posters on this site i think i (AT LAST) understand about expenses etc :j and what i can include

I have now worked out that we would be correct to claim that the car is used 75%business use and 25% personal use.

So all out goings eg Road tax , insurance , repairs , fuel , radio rental , valeting costs etc should (?) be claimed as expenses at 75% ?

BUT....the thing is , my husband bought a car to use as a taxi just recently (9th April 2009) and we understand that we can count some of the cost as a capital allowance.

Using the figures above (75% business , 25% personal) could you tell me how much we can claim as a capital allowance ? The car cost just £1,500.

Im sorry if i appear dim but i just cant work this out and although everyone keeps explaning it and posting links i just cant work it out.

I really need to get this right (see my other posts as to WHY i need to get this spot on!)

Any chance you could work it out and just post the AMOUNT ?

Thank you ever so much

Joanne

Marcos117

Pennywise wrote: »

You'll be eligible for the 100% annual investment allowance not the basic 20% so YES, you can claim half the cost of the computer as a capital allowance for the year of purchase, but nothing else in future years.

Now I'm confused... So if the laptop was £799 I can put £399.50 down as capital allowance this year?

zygurat789

You can claim the Annual investment allowance on your laptop of 100% ie £799. It now has a tax written down value of nil, so no more next year. However, since it is 50% private you can only reduce your profits by £399.50.

malcindebt

joanne_d wrote: »

Pennywise.

You always give good advice.

My husband has just started out self employed as a taxi driver and thanks to the patience and advice of the posters on this site i think i (AT LAST) understand about expenses etc :j and what i can include

I have now worked out that we would be correct to claim that the car is used 75%business use and 25% personal use.

So all out goings eg Road tax , insurance , repairs , fuel , radio rental , valeting costs etc should (?) be claimed as expenses at 75% ?

BUT....the thing is , my husband bought a car to use as a taxi just recently (9th April 2009) and we understand that we can count some of the cost as a capital allowance.

Using the figures above (75% business , 25% personal) could you tell me how much we can claim as a capital allowance ? The car cost just £1,500.

Im sorry if i appear dim but i just cant work this out and although everyone keeps explaning it and posting links i just cant work it out.

I really need to get this right (see my other posts as to WHY i need to get this spot on!)

Any chance you could work it out and just post the AMOUNT ?

Thank you ever so much

Joanne

Joanne

As described in your thread last night this is the calculation you need.

Based on your confirmation that the car is used 75% for business use, was bought after 06/04/09 and has CO2 value of 140g/KM, the following calculation is what you need.

£1500 x 20% = £300

300 x 75% = £225

The Capital allowance is £225 and £1200 is carried forward

When you do the return the year after, you would claim a capital allowance as follows.

£1200 (which is £1500 less the £300 already claimed) x 20% = £240
£240 x 75% = £180

The year after assuming you still have the car and there are no other capital aloowances that have been brought into the pool, you could if you wanted claim the whole of the £960 remaining (£1200 - 240) as a small pool allowance as the total is less than £1000 , or follow the calculatuion again.

You can just add up all the expenses and claim 75% of the lot.

Things such as the radio hire are exclusively for the business, so you would need to claim 100% of that.

Fuel, really you should add up all the petrol bought and use the percentage method as it is impossible to say exactly what petrol is used for private and business use as there is always petrol in the tank when you fill up.