self employed - what expenses can be used???

longforgotten

One other thing I forgot to mention is client entertaining. For me it’s only an occasional lunch or coffee but that is still a legitimate business expense.

It maybe a business expense in that it shows on your profit and loss as an expense and therefore reduces your profit, but I think you will find it gets added back on your tax computation as a disallowable expense. Also you cannot claim back the VAT on any client entertaining.

I would be most grateful if WHA could shed some light on this as to whether my comment is totally correct.

dunstonh

It was only a few months ago when the same subject came up that the accountants on the board said that clothing wasn't claimable and quoted that case.

I will go back to purchasing my suits via the business account and leave it to the accountant to decide. I pay them to make the decisions on what is and isnt claimable. The things the accountant knows about [that i dont] and claims for (depreciation being a good example) covers that cost and I think use of a good accountant is sensible.

WHA

dunstonh wrote: »

It was only a few months ago when the same subject came up that the accountants on the board said that clothing wasn't claimable and quoted that case.QUOTE]

That was correct, the HMRC manual has been amended more recently and only became general knowledge amongst accountants in Feb/Mar 07. As I understand it, HMRC lost a case on the "duality" principal and has subsequently, very quietly, updated its own manuals, without any press-releases or official notification, no doubt in the hope that accountants and taxpayers don't notice! Unfortunately, the absence of publicity has also had a side-effect of HMRC's own staff not knowing that things have changed either, so they continue to give wrong advice when asked!

WHA

longforgotten wrote: »

It maybe a business expense in that it shows on your profit and loss as an expense and therefore reduces your profit, but I think you will find it gets added back on your tax computation as a disallowable expense. Also you cannot claim back the VAT on any client entertaining.

I would be most grateful if WHA could shed some light on this as to whether my comment is totally correct.

Yes, you're quite correct.

nicpicot

WHA wrote: »

The Mallalieu case is over 20 years old, the new rules referred to by Cook_County are very recent, just a few months, and he has quite rightly pointed out that the new rules have yet to be tested in the courts, therefore, there is every chance that the Mallalieu decision which was based wholly on the old (and now apparently obsolete) notion of duality of purpose preventing any claim will be overturned. More recent rules/laws will always take precedence over older ones.

I have a digital camera for my own use. I also bought a digital camera to keep on my office desk so I can take images of items I want to sell on my website. I keep my personal camera where I normally sleep. I also use a camera in my workshop and when i am out.

How does the Mallalieu case reconcile with items I thought the case was about clothes?

nicpicot

WHA wrote: »

The Mallalieu case is over 20 years old, the new rules referred to by Cook_County are very recent, just a few months, and he has quite rightly pointed out that the new rules have yet to be tested in the courts, therefore, there is every chance that the Mallalieu decision which was based wholly on the old (and now apparently obsolete) notion of duality of purpose preventing any claim will be overturned. More recent rules/laws will always take precedence over older ones.

I normally travel in jeans and a t shirt. I perform in a smart designer suit shirt tie and shoes which I change into at the place of performance. What is the tax implication? I also need to claim for a suit carrier.