Second income - tax returns & expenses

doodoot

Hi everyone, I've been on here lots of times to read advice given to others and always found it helpful.

Now it's my turn to try and get some.

I'm currently employed part-time and am just under the lower tax threshold, and I claim child tax credits jointly with my partner - our combined income is over the maximum for working tax credits.

I've just been offered a second job where I will be classed as a supplier of services, and so will be self-employed and working from home - I know that I need to sort out my tax and NI myself.

I need advice on the following as I'm struggling to make head nor tail of what I've read, and I'm fed up being in a queue to HMRC.

I will use 1 room in our house to work from using the land line telephone - I will be a chat-line supervisor - so can I claim part of the household bills and phone rental as expenses?

Also, how do I work out the percentage that I can claim?

When it comes to telling HMRC my self-employed earnings will they expect me to also declare my earnings from my current employer, or do I just tell them the self-employed total and let them get on with working out my deductions?

The company that I will be working for are also taking the first £10 out of my earnings for training and admin fees - can I claim this too?

All advice gratefully received x

laticsforlife

In terms of expenses, I would NOT try to claim any portion of the rental of your phone (but all the business calls) as the rental would be paid in whole whether or not you worked on the chat-line, hence no part is wholly and exclusively for the purposes of the trade.

I would also suggest you enrol in education courses offered free by HMRC (not sure of the number to call)

Yes you need to register as self-employed and it is rather important that you aggregate all your income on the subsequent tax return (it doesn't necessarily mean you pay any more tax), as the PAYE income will have been taxed already so this also goes on the tax return.

It's not as daunting as it first seems, the online process is quite helpful, and your affairs will be quite simple. Just keep proper records of all your income and expenses from the chat line work.

As for the £10, HMRC will be happy for you to either report the full amount and claim the £10 or report the net that you receive as income, the result is the same.

doodoot

Thanks for your reply.

I didn't think I could claim the rent, but can I claim for a portion of council tax and utility bills?

I won't be making calls myself, just receiving them - can I still claim for part of the phone rental, considering that I can't do the job without it?

As for the courses run by HMRC, I shall definitely check them out.

I will just make sure that everything and anything gets put on a spreadsheet, and then I can sift through it come tax return time...thank god I listened when I went to a voluntary excel taster session in my last job!

laticsforlife

The point about any expense you claim is that is is supposed to be incurred wholly and exclusively for the purpose of the trade.

The important word there is exclusively, which doesn't really mean split use, however,

HMRC WILL accept some apportionment of electricity and maybe a little gas for the heat of the specific room, but I would baulk at Council Tax as to be fair you ought to pay business rates on the place of business and claim that (don't think you want to go down that line do you).

as for the courses here is the link,

http://www.hmrc.gov.uk/bst/

NB they do an expenses course with much more (current policy) information.

doodoot

You my friend, are a total star. :beer: