Sole trader courier help

Sharp161

Hi guys i recently because registered as a sole trader. Just working out what I can use for my expenseses. I have a business bank account and a van.

Each week I pay for my own fuel roughly £800 then at the end of that week I invoice whoever I worked for my wages for the week and also that fuel cost.

Iv paid for the fuel all out of my business bank account and kept every receipt. This money stays in that account and I move my wage to my personal account.

Does this fuel cost count towards my expenses like my business phone bill, even though I'm paid it back weekly?

Also if the tax man ever wants to check me out will he just want to see statements from my business account or would he want to see invoices that I sent out and the receipts i kept for fuel? Just wondering weather to keep these past the tax year.

Thanks.

HHarry

Yes

If you don't submit the fuel receipts as an expense, the fuel money will be income and taxed.

Sharp161

Ok thanks for the quick reply buddy.

My fuel bill over a year then is 40k ish my wage is 14k ish. So with my fuel expense so high means il pay no tax?

I figured because im invoicing whoever i work for that week for fuel it wouldnt count.

HHarry

Well your total invoice value should be £54k. If you don't submit fuel receipts you'll get taxed on the lot.
Submit the £40k expenses, and you'll get taxed on £14k.

Going4TheDream

You'll want to submit your servicing, PSE equipment, tax insurance and your GIT insurance, (I assume you have this?) they are all tax deductable

00ec25

Sharp161 wrote: »

My fuel bill over a year then is 40k ish my wage is 14k ish. So with my fuel expense so high means il pay no tax?.

no - as HHarry says your turnover is 54 and your expenses are 40 leaving a net profit of 14 which is taxable.
as going 4 says there will also be other expenses you can deduct from your turnover so it is very possible you will get down to your personal allowannce of 8105 and then , and only then, will you not have any tax to pay

remember though you will still need to pay NI as that is separate

John_Pierpoint

Sharp161 wrote: »

Hi guys I recently because registered as a sole trader. Just working out what I can use for my expenses. I have a business bank account and a van.

Each week I pay for my own fuel roughly £800 then at the end of that week I invoice whoever I worked for my wages for the week and also that fuel cost.

Iv paid for the fuel all out of my business bank account and kept every receipt. This money stays in that account and I move my wage to my personal account.

Does this fuel cost count towards my expenses like my business phone bill, even though I'm paid it back weekly?

Also if the tax man ever wants to check me out will he just want to see statements from my business account or would he want to see invoices that I sent out and the receipts I kept for fuel? Just wondering weather to keep these past the tax year.

Thanks.

You appear to have got the basics correct but certain words you use suggest you are still thinking like an employee. Someone who is the servant part of a master and servant relationship:

I invoice whoever I worked for my wages for the week.
Are you being paid by the hour? How do you find the work ?
It looks more like self employment if you invoice for the job done, presumably the cost of the job is more related to consignment miles than hours?

One of your largest expenses will be the depreciation of your van (or the cost of breakdowns & repairs if its an old one). How you account for your vehicle costs, including the depreciation, is likely to be by far your major deductible expense. Perhaps there is some "fudging" going on here because your customerscan reclaim VAT as input tax, but you cannot?
If you explain in more detail about van - size, age, cost someone with more experience than I have, will be along with suggestions.

There are lots of threads on here about the joys of setting up as a sole trader, such as this one:

https://forums.moneysavingexpert.com/discussion/4275745