newly self employed!

Pip123

Hi, recently started work as a self employed domestic cleaner. Although the company has now closed and so i am working for myself.Registered with HMRC and am paying NI. Thought when i registered they would send me info on what i can claim back but they haven't so am unsure about what i can claim back and what isn't allowed. For instace cost of petrol and the insurance costs etc.

Also i am doing my own accounts-any helpful tips/ info on doing this would be greatly appreciated. I am keeping receipts and log everything i am getting paid. I get paid cash-should i put this into a business account as proof or is it fine just to log it myself in my accounts?

Thanks for any help-feel free to point me to other sites if needed.

FatAndy

The key phrase is that the expenses must be incurred "wholly, necessarily and exclusively" in the running of the business, although it's up to you to decide what particular expenses that relates to. This will presumably include cleaning materials but also things like stationary, advertising, repairs, etc

As far as motor expenses are concerned the best way to work out what to claim is to keep a notebook in your car and record all your journeys. Then work out what proportion are business and what proportion are private and claim the appropriate proportion of your total annual cost. e.g. If 80% of your journeys are business then claim 80% of your petrol, insurance, tax, etc. Keep your written records so if HMRC query your claim you've got something to back it up. You should also be able to claim an appropriate proportion of your telephone bills if you use the phone for business (you should be able to use your bill to work this out).

You may also be able to claim part of your household expenses if you have a room at home that is used for book-keeping, storage, etc.

It's also a good idea to open a seperate business account as this will make it easier to seperate out business and private expenses although there's no legal requirement to do this.

It might be worth finding a local accountant that offers a free initial consultation just to get some advice to get yourself started.

Gertie_Walker

Fat Andy is not quite correct on tax law for self employed people. The 'necessarily' rule does not apply to self employed people. You expend whatever you judge to be in the interests of the business. The law which he quotes relates to employees.

You include all your business expenses in your accounts and then add back anything which has a private element when you self assess.

Always bank all cash - even if you need to withdraw it later for spending and keep a mileage log in your car.

Savvy_Sue

Always bank all cash, and always write a receipt for cash!

Pip123

Thank you so much Fatandy,Gertie Walker and Savvy_Sue. This has been really helpful.

moontree

HMRC run workshops on business expenses and tax returns which I've found really helpful for explaining all this stuff (just been to one today, in fact!) You can find details here:

http://www.hmrc.gov.uk/bst/advice-team-events/work1.htm