Self employment and tax rebate`s ?

paul31_2

Hope someone can shed some light on tax rebate`s for me please.I`m a self employed Bricklayer,only ever worked PAYE in the past so green as grass when it comes to self employment.Got a few questions i hope can be answered...
1.I currently work for a contractor on a site where it`s possible that i might be moved to another job any day.Can i claim for the full cost of fuel to work and back or just a mileage allowance?

2.I bought a car that is only really used for work,can i claim for repairs etc?

3.and lastly what can i basically claim for that i should possibly know about,aint got a clue?

If i was to say for example i made £20,000 and i had expenses of £4000 consisting of travel mileage..tools etc,then how is a rebate worked out?is it based on a portion of your expenses paid back to you?my head is battered as i keep getting conflicting views from lads on site.Any help would be very much appreciated,thanks.

ncthomas1

1. You can do one of two ways. Either keep all the fuel receipts, then wok out the % of what is business, and what is personal, and then claim the business %. e.g total fule receipts £100 , business proportion, 50%, you claim £50. Or, you can work out how many business miles you travel and then multiply that by 0.40p (Normally works out miles more than doing it the other way)
2. Car repairs, again, if you had a repair bill for £100 and you worked out that the car is used 50% for work, you could only claim the £50. I would not try to claim for repairs if I used the 0.40p/ mile as that is designed to cover normal wear/ tear, unless of course you have something exceptional that happenned.
3. Claim for any expenditure that you incurred in being self employed. Food - not allowed. Safety/ protective clothing - allowed. Membership and subscriptions to professional body - allowed. Your old Levis that you wear on site - not allowed.
Do you have tools and equipment of your own that you brought to the self employment with you? If you do, you can claim for introducing them into the business too. Check out HMRC website under the section CAPITAL Allowances for equipment ok that will help you there.
Dont forget to deduct any CIS tax that the contractor has deducted already from you when you do the return
A REBATE is only when tax is owed back to you. You can not claim a rebate, if you havent paid any tax in the first place.
e.g. your income is £1000 and your expenses are £2000, you have made a £1000 loss, if you havent paid any CIS or PAYE tax, then you get no tax back, as you havent paid any. If you HAVE paid tax, then yes you get a rebate.
Tax is worked out like this (Very broadly speaking)
Your income is £10000, your expenses are £1000, you pay tax on the £9000 that is left (I have not gone into the personal allowance here not to confuse you but basically that comes off as well)
If you are stuck, shout, accountant here happy to help

paul31_2

Thanks a lot for the reply.So is the 40p a mile rule to include the commute to work and the return journey?or just one way?
So i gather that the rebate is worked out by taking the tax off what is left after expenses personal allowances etc.Then taking that tax amount away from the tax i payed on my overall earnings,thus leaving the rebate amount give or take.Am i somewhere near with that:rotfl:or miles away,providing it makes sense.Many thanks once again for the help.

ncthomas1

Commute is NOT allowable for tax relief in any way (If you think about it, people who are employed, rather than self employed, have to drive to work every day at say, Tesco, and they dont get their fuel refunded, so neither do self employed, sorry )
Your other summing up is spot on, couldnt have put it better mysel!

paul31_2

Thanks for the reply much appreciated.Yeah i see what your saying about the travel allowance.So for example i`ve been on the site im working at now for 4 weeks,and before that the other site was 3 months.Do they class this as a permanent place of work?Been talking to the lads todsay and they seem to think the rule is as long as your not in continuos work in one location or site for more than 12 months,then it`s not classed as a permanent place of work...thanks for all your help.

ncthomas1

Correct - I would think that is totally ok, as long as it is not a PERMANENT thing then it's allowed. Think of the rule being there for say, someone self employed, working in Bristol on a site, living in Cardiff, and they were there year on year, then that is clearly commute> Where as I would argue that the person living in Cardiff, going to Bristol for three months to build X Y Z is NOT permanent as the site has a finish date/ time so is non permanent.
Loads of other accountants will argue the relevant points now no doubt with my opinion, but this is how I have always seen it, is how WE deal with it for Clients tax returns, and I have no issues with it.
Check out hmrc website
this is what I see
A place at which an employee works is a permanent workplace if he or she attends it regularly for the performance of the duties of the employment. It is usually clear whether or not a place is an employee's permanent workplace (and, therefore, whether a journey to that place is ordinary commuting).

ncthomas1

An employee regularly attends a particular workplace if the attendance is frequent, or it follows a pattern, or if the place is one at which the employee usually attends for all or almost all of the period for which he or she holds, or is likely to hold, that employment.

The proportion of an employee's working time spent at a particular workplace is a factor in determining whether or not it is treated as a permanent workplace but it is not the only factor. Even if the employee attends the workplace only on one or two days a week, if it is on a regular basis, the workplace may still be a permanent workplace.

ncthomas1

What counts as business mileage?

Business mileage is mileage you travel doing your job. It can include travel to a temporary work place but it doesn't include:

• normal travel between home (or anywhere that is not a workplace) and your permanent workplace
• private travel

paul31_2

Great thanks,think i will put it on my next tax return as really im employed on a (when needed type of thing) on housing etc.Once again cheers for the advice.