Difference between expenses and capital gains?

evosy1978

Hello,

Im self employed. I wanted to know what effect expenses and capital gains have on your total income.

I understand that you get tax relief from one of them but Im unsure which? Is it capital gains? If so, then what effect does your expenses have on your final slalary?

thanks

CLAPTON

you pay income tax and class 4 NI on your PROFITS, that is the difference between your turnover and allowable expenses


capital gains tax is a tax on capital gains, that is the difference between the price you pay for an asset (say a property) and the price you sell it for.

what sort of buisnes do you have?
what sort of capital gains have you made?

ceeforcat

I could be way off the mark here but is original poster confused between selling items as part of his or her business and selling personal items?

evosy1978

Sorry,

Im a plasterer. I will be filling out my tax return form soon, which is why i was asking about allowable expenses and capital gains.

This year I have bought a van purely and solely for work only. I also have bought small tools to do my job. There is also the maintenance MOT and mileage on the van.. There is also my phone bill purely for work. I also paid for my plastering NVQ course. There are some other stuff aswell..

I understand that I have my profit which is everything Ive earnt in the year and then all my allowable expenses gets deducted from this and then that total is taxed and NI4. What I dont understand is what happens with the capital gains.

The reason I ask is because someone said I should put my receipt for my van in the capital gains box? If so what effect on my figures will this have.? A laymens set of figures as an example may help me:D

thanks

FTBFun

evosy1978 wrote: »

The reason I ask is because someone said I should put my receipt for my van in the capital gains box? If so what effect on my figures will this have.? A laymens set of figures as an example may help me:D

thanks

I think they're getting this confused with the capital allowances box, whereby you are allowed to write off a certain amount of your capital assets to tax each year.

Fortunately for you there is something called the Annual Investment Allowance, which lets you write off 100% of your capital assets purchased in the first year of up to £100k a year. I expect you'll fall into this category fairly easily.

John_Pierpoint

I also paid for my plastering NVQ course.

That is a grey area, in theory you can only claim for courses that keep existing skills up to date.You might want to check with fellow students & the course provider

evosy1978

FTBFun wrote: »

I think they're getting this confused with the capital allowances box, whereby you are allowed to write off a certain amount of your capital assets to tax each year.

Fortunately for you there is something called the Annual Investment Allowance, which lets you write off 100% of your capital assets purchased in the first year of up to £100k a year. I expect you'll fall into this category fairly easily.

AHH thanks

This is not my first year of business does that mean i cant claim it? Shall i not just add it to my allowable expenses?

thanks