Self Employment Questions

techguy1988

Hi,

I've recently become self employed and I have a few questions. If anyone could answer them that would be great.

1) What can I do to reduce tax? Can I put through lunch?
2) I am going to lease a car, is it worth putting it through the company? It will cost around £220 (Inc VAT) and I am VAT registered. The car is 105 mpg.
3) I've got a personal computer, but I now use that as a company computer. Can I put this through as an expense? If so, how do I do this? Do I invoice the company for the amount?
4) I heard if you're using you're vehicle for business purposes (as well as personal) you can also claim back any repair bills? Could anyone confirm?

Thanks.

chrismac1

1. PM me for fuller details on what you can and can't claim.

2. "through the company" - have you formed a limited company? Anyway, the lease payments are a business expense - or at least the % of business use is. VAT is more complex - unless your business is a taxi company, driving instructors or similar then 50% of the business element of the lease payments can be claimed on your VAT return. The nature of your business is critical to VAT - especially whether your sales are fully standard rated, or if you have some or all of your sales as zero or exempt.

3. You now mention a "company" again. yes you can sell any business assets to a Company - if you have formed one - at market value. This is a separate legal entity so note that the company will now own any such asset and not you - and no, they are not the same thing even if you are the sole director and own 100% of the shares. If you are running your business through the company and doing asset transfers (which is probably a good idea but not always) I think you should seek professional advice.

4. If your car is 100% business use you can put all bills through and claim 100%. But 100% it must be - HMRC once took a case to a Tribunal where a bloke had taken his pregnant wife to hospital on rush job as the baby was coming - "That was private use" the git from HMRC told the Tribnunal.

Overall if you are sole trading and going to do your own books, have a good read of the rules - especially VAT where there are probably good opportunities RIGHT NOW if you are newly registered, but also lots of pitfalls to watch out for like the 50% leasing rule. If you have formed a limited company, get professional advice RIGHT NOW because your accounts have to comply with the Companies Act 2006 and there are lots of ways you could go wrong and a limited number of ways you could go right. If you start out on the wrong track the final bill will be much higher.