Need help with what I can claim on tax return

pipscot

payless wrote: »

anyone see the major fault here

i took this to mean the contractor

jimmo

That really was a good post by taxing today. When someone first becomes self-employed (or a sub-contractor) it really can be a wise move to engage an accountant and get things working correctly. Then, maybe a year or 2 down the road, you may be confident enough to look after yourself.
These are a few points I think the OP may need to be concerned about.
1) He is self employed but sub contracted to a company. he paid 20% tax on his earnings.
Going back quite a number of years the "subbies" scheme officially referred to "sub-contractors in the construction industry."
In reality its purpose was to stop people working on building sites on "the lump" (cash in hand). Back in those days bricklayers, roofers, plumbers, electricians and labourers were the typical target.
2) He does terrific mileage a year.
Does the OP appreciate the difference between commuting and business travel?
3) Mileage Allowance.
It really is all or nothing. If you claim 40p / 25p per mile that's it. No Capital Allowances, no repairs and no hire charges. If you need to hire a specialist vehicle like a cherry picker on occasions that might be fair enough but hiring a van because yours is off the road will not get you any more tax relief.
As a former taxman I definitely lack the professional experience of planning these things out but my guess would be that if you buy a van for £1,000 you would probably be better off 40p /25p method. However with hire costs of £2,400 you would almost certainly be better advised rejecting the 40p /25p scheme. However, if you do so, you will be stuck with that for as long as you keep the current van.
4) He uses a room as an office, has to print out roughly 100 forms a week.
With my, old fashioned, concept of the "subbies" scheme I really cannot imagine a situation where a subbie needs to print off 100 forms in a year, never mind a week. Maybe things have moved on and, going back to point 2, if the need to print off 100 forms a week is genuine that may be a big pointer to the home being a place of business. If that is true there is no need to worry about the difference between commuting and business travel.
If you think I am going round in circles, you are right. In many ways that is your problem.
I really think you need professional advice.

pipscot

jimmo wrote: »

That really was a good post by taxing today. When someone first becomes self-employed (or a sub-contractor) it really can be a wise move to engage an accountant and get things working correctly. Then, maybe a year or 2 down the road, you may be confident enough to look after yourself.

Agree with this - particularly as the OP seems a bit unsure about how the self-employed system operates.

4) He uses a room as an office, has to print out roughly 100 forms a week.
With my, old fashioned, concept of the "subbies" scheme I really cannot imagine a situation where a subbie needs to print off 100 forms in a year, never mind a week. Maybe things have moved on and, going back to point 2, if the need to print off 100 forms a week is genuine that may be a big pointer to the home being a place of business.

The OP could be a surveyor or similar - this would explain the printing off and faxing of the forms

monkeychops

jimmo wrote: »

That really was a good post by taxing today. When someone first becomes self-employed (or a sub-contractor) it really can be a wise move to engage an accountant and get things working correctly. Then, maybe a year or 2 down the road, you may be confident enough to look after yourself.
These are a few points I think the OP may need to be concerned about.
1) He is self employed but sub contracted to a company. he paid 20% tax on his earnings.
Going back quite a number of years the "subbies" scheme officially referred to "sub-contractors in the construction industry."
In reality its purpose was to stop people working on building sites on "the lump" (cash in hand). Back in those days bricklayers, roofers, plumbers, electricians and labourers were the typical target.
2) He does terrific mileage a year.
Does the OP appreciate the difference between commuting and business travel?
3) Mileage Allowance.
It really is all or nothing. If you claim 40p / 25p per mile that's it. No Capital Allowances, no repairs and no hire charges. If you need to hire a specialist vehicle like a cherry picker on occasions that might be fair enough but hiring a van because yours is off the road will not get you any more tax relief.
As a former taxman I definitely lack the professional experience of planning these things out but my guess would be that if you buy a van for £1,000 you would probably be better off 40p /25p method. However with hire costs of £2,400 you would almost certainly be better advised rejecting the 40p /25p scheme. However, if you do so, you will be stuck with that for as long as you keep the current van.
4) He uses a room as an office, has to print out roughly 100 forms a week.
With my, old fashioned, concept of the "subbies" scheme I really cannot imagine a situation where a subbie needs to print off 100 forms in a year, never mind a week. Maybe things have moved on and, going back to point 2, if the need to print off 100 forms a week is genuine that may be a big pointer to the home being a place of business. If that is true there is no need to worry about the difference between commuting and business travel.
If you think I am going round in circles, you are right. In many ways that is your problem.
I really think you need professional advice.

Thanks for all the replies. I think you are right and I do need proper help so will be looking for an accountant tomorrow! Just heard so many horror stories about accountants!

Just to set a few things straight:-

My husband is self employed but contracted to a company.

He is an emergency call out plumber and covers a very wide area. His petrol is at least £200 a week.

Even if the first journey from home to the first job and the journey home from the last job are classed as "commuting" surely the rest of the time driving between each job are not?

He works 6 sometimes 7 days a week - long hours (we are trying to save!) and for every job he does he has to fill in a work sheet and a cover sheet and fax them to the company. They do not supply the forms we have to print them out. He also often has to fill in "update" forms and fax them.

I personally have not found the HMRC website much use. It is confusing and I could not work out if you could only claim fuel as opposed to mileage if you had a company vehicle - which he does not.

pipscot

monkeychops wrote: »

Thanks for all the replies. I think you are right and I do need proper help so will be looking for an accountant tomorrow! Just heard so many horror stories about accountants!

Just to set a few things straight:-

My husband is self employed but contracted to a company.

He is an emergency call out plumber and covers a very wide area. His petrol is at least £200 a week.

Even if the first journey from home to the first job and the journey home from the last job are classed as "commuting" surely the rest of the time driving between each job are not?

He works 6 sometimes 7 days a week - long hours (we are trying to save!) and for every job he does he has to fill in a work sheet and a cover sheet and fax them to the company. They do not supply the forms we have to print them out. He also often has to fill in "update" forms and fax them.

I personally have not found the HMRC website much use. It is confusing and I could not work out if you could only claim fuel as opposed to mileage if you had a company vehicle - which he does not.

I would not think that you need to worry about the difference between commuting and business travel - since your OH spends a lot of his time working from home, you could legitimately say that is his workplace.

Motor expenses for the self-employed should not be that complex (HMRC website does seem a bit disjointed at the moment). There are basically 2 methods, either the mileage method which you are using or the "claim back everything" method where you keep all your diesel receipts, repairs receipts etc and total them up when doing your accounts. But you must be consistent - not mixing methods unless you have changed vehicle as another poster pointed out.

I think in this instance since your OH has made a good profit, it would be worth your while speaking to an accountant.
Even if they charge you a couple of hundred pounds to prepare business accounts and file your OH's tax return, the likelihood here is that they will probably save you a couple of hundred pounds in tax so in effect they won't cost you anything.

ceeforcat

Well done taxing - said many things that I have always wished to say but was sceptical as to how it would be received. It is amazing how many will regard as accountancy fees as the least necessary expense when looking to save money.

yakface77

I was just about to post a similar thread here, but i read this first.
I too am self employed, and was considering the option of submitting my own self assessment this year to save some money, after reading this thread i will be ensuring that my trusty accountant still works for me lol. I think its a great £250 well spent.
Yes i do the income and expenditure spreadsheets, but i feel that a professional will ensure all is correct, and im sure will save me 'their fee' as alowable charges change every year.;)