Private tutor claiming library fines as expenses?

emilyteach1

Hi people.

I make a [very small] profit as a private tutor as a sideline to my paid employment.

I have only been doing it for a couple of months so I'm yet to submit a SA tax return, but I'd like to keep on top of my figures as I go, rather than navigate a big pile of bank statements versus receipts when the deadline does come.

I incurred some library fines lately [a grand total of £7] for books and materials that I use for my tutoring. I realise that it's nobody's fault but my own, but was wondering if anyone could advise whether or not this £7 could be claimed as expenses, thus reducing my tax bill?

Most expenses I plan to claim for are pretty clear cut; stationery and the likes; but I'm not sure where the rules and regulations stand on the issue of self-incurred, avoidable fines!

Many thanks.

olivetti

No.

http://www.hmrc.gov.uk/manuals/bimmanual/bim42515.htm

PlutoinCapricorn

If I were in your position, and assuming that your self employment turnover is under £30,000 - which means that you submit totals only not an itemised list - I would include the fines and hope for the best. I believe that parking fines while on business are not allowable, but this is a very small amount.

If ever they investigated you, you might need to pay a tiny amount of extra tax if you had no evidence that textbooks were involved or HMRC decided not to allow this as a legitimate expense. You would probably pay less tax if you bought instead of borrowing these books.

emilyteach1

PlutoinCapricorn wrote: »

If I were in your position, and assuming that your self employment turnover is under £30,000 - which means that you submit totals only not an itemised list - I would include the fines and hope for the best. I believe that parking fines while on business are not allowable, but this is a very small amount.

I didn't realise that I would be expected to submit just a total, rather than a list; thanks for the info.

If ever they investigated you, you might need to pay a tiny amount of extra tax if you had no evidence that textbooks were involved or HMRC decided not to allow this as a legitimate expense.

Although I realise it's a tiny matter and a piddling amount of money, this scares me! I wouldn't make a good tax evader

You would probably pay less tax if you bought instead of borrowing these books.

True. I own the majority of my materials [I need to], but I did a pretty much one-off session in a subject I don't like, and don't teach often [GCSE science], hence why I don't own the books, and totally forgot I was holding them!

PlutoinCapricorn

If your total income is below £30,000 the tax return just wants total income, total expenses and deducts the latter from the former to produce the profit on which you will be taxed. However, it is best to keep a full list with receipts or other evidence in case HMRC ever decides to investigate you. I keep all figures on a spreadsheet and can everything.

It is best to register for the online submission, which is much better than filling in and posting a form.

dmg24

emilyteach1, I would weigh up the benefit of having the fine as an 'expense' against the hassle (and expense!) of an investigation for tax evasion. Remember that if they find one error, they will look for more. It seems like a no brainer to me.

TM1976

Personally I would include this as an expense because I think it's incurred wholly and exclusively in the purposes of the trade.

The chances of getting a tax inspection over this are virtually nil and I can't see that HMR&C would make a fuss about this alone as it's probably only worth £1.40 in tax.

Library fines aren't fines in the legal sense such as a parking fine, rather they are charges for not returning books within the library's terms.

PlutoinCapricorn

Yes, it is more an additional charge - similar to a reservation fee. If you were asked to submit a list of expenses, a 'sundries' section for minor miscellaneous items is acceptable.

However, if you don't feel that you can live with the uncertainty, then don't include it.

Filing your tax return very early or on the last day is a red flag that might trigger HMRC into requesting additional information. Another is expenses that are much higher than other part-time freelance tutors with PAYE jobs are claiming.

Pennywise

I don't want to get too bogged down in the technical detail, but if it is an "excess" or "penalty" charge rather than a fine for breaking a law, it would be allowable if wholly & exclusively for the trade. HMRC website won't say, but even parking fines are allowable if they're not for "illegal" parking, i.e. overstaying your time in a private car park - you're paying a "penalty" for staying too long - you've not broken a law, so HMRC can't disallow! The same may apply for library "fines".