Self-Employed Newbie

[Deleted User]

I'm writing this on behalf of my girlfriend who recently graduated from Uni and has just recently started self-employed as a journalist at a newspaper.

This is the first time she has worked self-employed and it's something I've never done and am struggling a little to get my head around what she has to do and what she can claim tax back on... basically just all round confusion.

She is only working 2 days a week at the newspaper as there is a little concern over the stability of the paper and we thought it wise she didn't go full time just yet and retained her part-time job in as a sales assistant in a retail shop. So she has a contracted minimum of 10 hours at the retail shop and 2 days self-employed at the newspaper.

She is still waiting on a tax number and has not been paid from the newspaper after 3 weeks now.

We just need to be certain she is doing everything correctly right from the start and she is keeping all receipts and such like that she has to so nothing is missed.

But what sort of things does she need to keep, what sort of things can she claim tax back on. Can she claim tax on travel to and from work, or just miles when travelling to and from interviews and such like? Can she claim anything on food? Stationery or other equipment?

Also... this is a bit of a side but worth looking into if it's viable... we are after a pick up truck as we have 2 big hairy dogs (newf and tibetan mastiff) and know there is tax breaks on such vehicles for self-employed, could she potentially buy one of these at a saving?

Basically any advice on being self-employed for the first time, anything things we should be extra careful about, any nuances to being self-employed and employed normally at same time in 2 part-time roles?

Thanks in advance and sorry if I'm missing some already obvious advice/threads on here.

[Deleted User]

Ok well it's not easy to tell you everything here, actually it's impossible and takes people many years to learn.

First thing is to decide whether or not your gf will complete her own tax return or use the services of an accountant.

If your going to use the second option and opt for a professional then I'd suggest you simply put this question to them as they will often answer for free, knowing that you will pay them for the return at the end of the year.

You seem to be looking at what can be offset against tax, but I'd really look more to the tax return first, don't forget you will have to calculate your own tax and ensure this is paid at the end of the tax year (in theory)

She won't really be claiming back tax, because of course it will just mean that she will pay less tax. Unless she is going to claim tax back that was paid from her PAYE she won't need to be claiming tax back.

I'd suggest that you post this in the small business forum and look at what expenses are "allowed" rather than what you can claim tax back on.

There are many tax allowable expenses and you have named just a few, but you will need to read a great deal and fully understand because a mistake or mistakes can be costly.

As for vehicles, you can only offset what is used for business, so in theory yes "some" can be offset.

So there is a lot to consider and I think you have stated that she has already registered as self employed, so the leaflets and forms will come to you - they should help a little!

I'm confused that she hasn't been paid, surely she will just invoice and get paid (what are her payment terms?) , she does not need anything from HMRC to do this, she simply keeps a record of everything that she is paid. Likewise keep records of all spends.

P.S - I was new to this 6 months ago, I have learnt so much, I'm also still learning

John_Pierpoint

If your girlfriend is really self employed, you need to explain how she charges for her services rendered.
As a self employed person she is running a business activity and trying to make a profit.
After the end of the tax year she will make a self assessment tax return of sales and legitimate expenses and the difference will be the profit, potentially liable to income tax.
On that self assessment tax return she will also show her other income and tax paid - eg savings account (where she saves up some money withdrawn from the business in anticipation of the tax system catching up with her business) and her PAYE employment shown on the P60.
Keep the "business" turnover and expenses in their own "bank" account, to separate the business related transactions for those for normal daily living.

To maintain the "self employment" status, it would be advisable to get more than one customer.

Dal_Whinnie

The most important question your girl friend needs to establish initially is whether she is self employed, this will be a question of fact rather than that the newspaper told her she was. There has been a lot of publicity around this area of late so have a look on HMRC website , pcg.org.uk and other sites. Ask other journalists, etc. Do the so called badges of trade fit? Does she get paid a set amount for 2 days work or does she get paid per article? Is she told what to write about, where to visit, etc or is she free to employ her journalistic instincts.

Regarding expenses then in broad terms she can claim any cost which she expends in earning her fees. Again, HMRC give full details of what they consider deductible. If she is self employed then she should be able to claim travel from wherever her business base is to her clients or any other travel to get stories or information but the pick up truck might be a bit of a stretch, having said that the proportion of running costs of a vehicle based on miles driven carrying out her work would be allowable so why not a pick up truck, gives cover.