Small biz tax : Creative ideas

joshtbh

hi all,

If I were to start a small business or become self employed; can I have some ideas please for ways of making the most of tax allowances?

I.e. I remember someone I once knew claimed certain bits back against fees to keep her pet in their house as a "guard animal".

or I believe there are ways of claiming car fees against tax for if you're self employed and use the car to travel for your company etc?

I'd love some sharing of resources from you guys in the know without paying for an expensive "creative accountant"!

I'm not trying to cheat the government out of any tax before anyone says! Just want to hear some tips I may not have thought about. :money:

paddyrg

Pet as a business expense sounds a bit close to the line to me - I wouldn't want to try to defend that if HMRC audit. And that is true of all these creative ruses, they are all well and good until HMRC audit, then you're in such deep doodoo with back tax and fines that it can wipe out your business and frequently leave you personally liable.

Savvy_Sue

TBH, I think you have a choice.

Either you DIY and read up on the HMRC website, Businesslink etc which is unlikely to lead to much creativity.

Or you pay an accountant, which need not be expensive if you find the right one, and their knowledge and expertise saves you more than they charge.

But atm you just seem confused about the whole thing.

joshtbh wrote: »

I.e. I remember someone I once knew claimed certain bits back against fees to keep her pet in their house as a "guard animal".

What 'fees' are we talking about?

joshtbh wrote: »

or I believe there are ways of claiming car fees against tax for if you're self employed and use the car to travel for your company etc?

If you're self-employed, you don't have 'your company' to claim against. You might be a sole trader, but you don't have a company: it's just you and your personal tax liability.

Any expenses which you NECESSARILY incur in the course of your business can be deducted from your 'profit' to reduce your tax liability. So if it's necessary for you to drive, there are various ways of working out the 'expense' of that. If you really think you need a 'guard animal', then the expense of that can also be set against your tax liability. Arguing with HMRC that the family cat or guinea pig is such a guard animal would definitely be one for the accountant.

If you set up a limited company, life becomes more complicated and you really could do with advice from an accountant, even about whether that's a cost effective thing to do.

joshtbh wrote: »

I'm not trying to cheat the government out of any tax before anyone says!

Just as well, never recommended ...

BTW, I'm not an accountant, before you ask. I just feel that if your business affairs are anything other than straightforward, then an accountant can probably save you money. You might feel after a year or two that you know what to do, but to start with it's useful to know what's legitimate and what's not, and an accountant knows what they need to ask to give you 'best advice'.

joshtbh

Savvy_Sue wrote: »

What 'fees' are we talking about?

pet food, bedding etc.

If you're self-employed, you don't have 'your company' to claim against. You might be a sole trader, but you don't have a company: it's just you and your personal tax liability.

fair enough, think i'd be getting a company together rather than sole trader. Bloke with the animal i'm on about I can't remember is company or sole trader..

Any expenses which you NECESSARILY incur in the course of your business can be deducted from your 'profit' to reduce your tax liability. So if it's necessary for you to drive, there are various ways of working out the 'expense' of that. If you really think you need a 'guard animal', then the expense of that can also be set against your tax liability. Arguing with HMRC that the family cat or guinea pig is such a guard animal would definitely be one for the accountant.

I love this kind of stuff any more ideas like these?

If you set up a limited company, life becomes more complicated and you really could do with advice from an accountant, even about whether that's a cost effective thing to do.

Just as well, never recommended ...

BTW, I'm not an accountant, before you ask. I just feel that if your business affairs are anything other than straightforward, then an accountant can probably save you money. You might feel after a year or two that you know what to do, but to start with it's useful to know what's legitimate and what's not, and an accountant knows what they need to ask to give you 'best advice'.

I didn't assume you were. I think I will get an accountant if I can find a decent cost one that comes recommended I can trust.

pitkin2020

LMAO, you are already at looking at ways to avoid tax and you have no idea what business your going to do. How can anyone offer you advice on stuff that is claimable without an idea of what you will be doing. No one WANTS to pay tax so will find any legal way to claim against everything they can to bring their liability down. Claim for things you shouldn't be or even border on that are very hard to prove.

For example, yes you can claim for a dog as a guard dog if you have premises that needs protecting or your a security guard lets say, but if your a hairdresser what feasible reason would you need for a guard dog.

Your seriously need to work out what you are going to become and worry about what you can or can't claim later. Setting up a LTD company without understanding the ins and outs when compared to a sole trader is madness. Why not become VAT registered too, you can claim back all the VAT.

Sorry if that sounds harsh but you start a business for the income you can generate off it or because its something you (think/hope) will be a success and its something you really enjoy, not for what you can save on your day to day living costs, its a bit back to front.

Acc72

pitkin2020 wrote: »

Your seriously need to work out what you are going to become and worry about what you can or can't claim later.

I agree with the above.

Also, if / when your business is operating I would recommend paying an accountant (not just taking advice from some bloke down the pub who once claimed £1.50 for dog food as an allowable expense!) to make sure that your financial affairs are covered, and you should spend all of your time on the business generating sales etc.