self employment, what can i claim?

eadesface

hello, i am self employed and work from home, I run an online clothes business. not a big business at the moment and has only been going around 8 months.

I have heard lots about what i can put on my books to claim back on my tax return.
Currently i include,

Postage, stock, initial equipment to start the business (eg computer, etc.)

what else can i include?

Thankyou

HappyMJ

A portion of the rent or mortgage interest (not the payment just the interest charged on the mortgage). A portion of the gas, electric, council tax, water, buildings and/or contents insurance. A portion of your mobile costs, your home phone line and home broadband costs. Any costs renovating the room that the business has sole use of can be claimed 100%. Any costs spent in maintaining the rest of house you can claim a portion of. Travel at 45 pence a mile or a portion of all the vehicle expenses if that works out higher and if you have every single receipt.

Is there anything else you spend? You can probably claim it.

eadesface

thankyou for the reply, the problem i see with all the claims you can put from your home is that i live at home still with my parents so mortgage and binternet and phone bills are all in their name. I have an office which is solely used for me to work out of.

The fact that all bills are in my parents name, does that mean i cant claim?

Thankyou

simplydevine05

If you are claiming a proportion you would need proof of the bill in the first place and you cannot pay rent to your parents. If you are claiming things like council tax and you have a room used solely for business it is worth checking if you need to pay business rates instead of council tax. You cannot claim for the full price of large items expected to last years like a computer. You can only claim the value it has depreciated by eg if you expect it to last five years, divide the total cost by five and claim that each year. If it is used for any personal use at all then you cannot claim for it. Basic rule is you can claim for any amount incurred purely for business use. If there's any personal use in there then it's a no. Electricity is hard to work out what proportion of the usage is yours when working ie lights on, computer on. I found this to be so little it wasn't worth bothering. Water cannot be claimed if you don't use any for business and other proportionate costs are difficult too. If you search Google there's lots of information provided by hmrc and I have always found their staff to be very helpful when I've called to ask questions.

HappyMJ

simplydevine05 wrote: »

If you are claiming a proportion you would need proof of the bill in the first place and you cannot pay rent to your parents. If you are claiming things like council tax and you have a room used solely for business it is worth checking if you need to pay business rates instead of council tax. You cannot claim for the full price of large items expected to last years like a computer. You can only claim the value it has depreciated by eg if you expect it to last five years, divide the total cost by five and claim that each year. If it is used for any personal use at all then you cannot claim for it. Basic rule is you can claim for any amount incurred purely for business use. If there's any personal use in there then it's a no. Electricity is hard to work out what proportion of the usage is yours when working ie lights on, computer on. I found this to be so little it wasn't worth bothering. Water cannot be claimed if you don't use any for business and other proportionate costs are difficult too. If you search Google there's lots of information provided by hmrc and I have always found their staff to be very helpful when I've called to ask questions.

thankyou for the reply, the problem i see with all the claims you can put from your home is that i live at home still with my parents so mortgage and binternet and phone bills are all in their name. I have an office which is solely used for me to work out of.

The fact that all bills are in my parents name, does that mean i cant claim?

Thankyou

You can claim.

You can pay rent to your parents. Get your parents to bill you as a person for your bedroom and to give you another bill for your business in your business name for another room. Pay the rent from your personal account for your own bedroom and pay the rent from the business account for the room required for the business. Get receipts. You can then claim 100% of that second payment. Your parents as owners of the property would then declare that as business income and can then claim a portion of all the household expenses on their own tax return. They will (or at least they should) cancel each other out so there isn't any tax to pay.

Business rates are not due if no customers are visiting the premises and there is no need to inform the council.

Water can be claimed. The employees or the workers require toilet facilities, tea/coffee making facilities and certainly require hand washing. So water can be claimed. http://www.hmrc.gov.uk/manuals/eimanual/EIM32815.htm It's hardly anything in reality. Let's say 50 litres per full time (40 hour) worker per day 5 days a week 40 weeks a year. 10 cubic metres in total at about £2 a cubic metre is only £20 per year. And another HMRC article which could be used although it's for child minding is http://www.hmrc.gov.uk/manuals/bimmanual/bim52751.htm so if you work from home for 10 hours a week you could claim 2% of the annual water bill as a general rule which really isn't much.

eadesface

Im a little confused on how to log my records.
I have a cash book program on my computer where i have logged everything out (stock and postage etc) and everything in (sales), which gives me a running total.

I have also kept receipts of all postages and stock orders and have records via paypal of all sales.

Is there anything else i need to do?

Cheers for the help

simplydevine05

HappyMJ wrote: »

You can claim.

You can pay rent to your parents. Get your parents to bill you as a person for your bedroom and to give you another bill for your business in your business name for another room. Pay the rent from your personal account for your own bedroom and pay the rent from the business account for the room required for the business. Get receipts. You can then claim 100% of that second payment. Your parents as owners of the property would then declare that as business income and can then claim a portion of all the household expenses on their own tax return. They will (or at least they should) cancel each other out so there isn't any tax to pay.

Business rates are not due if no customers are visiting the premises and there is no need to inform the council.

Water can be claimed. The employees or the workers require toilet facilities, tea/coffee making facilities and certainly require hand washing. So water can be claimed. http://www.hmrc.gov.uk/manuals/eimanual/EIM32815.htm It's hardly anything in reality. Let's say 50 litres per full time (40 hour) worker per day 5 days a week 40 weeks a year. 10 cubic metres in total at about £2 a cubic metre is only £20 per year. And another HMRC article which could be used although it's for child minding is http://www.hmrc.gov.uk/manuals/bimmanual/bim52751.htm so if you work from home for 10 hours a week you could claim 2% of the annual water bill as a general rule which really isn't much.

I would suggest looking at voa.gov.uk about business rates as they can be due where one room is used soley for business use whether customers visit or not. Especially if you decide you are going to rent business space however it is deemed as your home. If you lived with a partner but the bills were in their name would consider the house not your home? And the rule is that you cannot rent your own home. I highly recommend looking at the hmrc and business link websites and/or ringing hmrc because they do have spot checks and if you are picked and you are rule breaking you will be in major trouble. At least that way you can see for yourself instead of listening to random strangers say opposing things!