Really small business writing down allowance

richimgd

Hi,

I'm a full time web developer who also started as a sole trader in November 2011 as I took on a few small freelance web and graphic design jobs and I figured I'd like to do things properly incase I end up going into business full time. So I have kept all my income and outgoings in a business account for my own sanity.

I am in the process of filling my tax return for 2011-12.

Income is quite modest since this is really more of a side project. So for 2011-12 I have an income of just under £2000.

I have about £375 of operational expenses (£3 per week working from home costs, web hosting, stationery etc). I did not think to put my phone and internet though the business account at the time so not sure if I could grab some old bills and work out the costs and include them?

A question I have been meaning to find out for a while and the main purpose of this threadis writing down allowances. I have some computer equipment I bought about 5 years ago that I still use for business use such as a computer, monitor and printer. This all comes to roughly about £2000, I have all the receipts for this. I read somewhere that you can claim for certain equipment bought up to 7 years before going into business, so it seems this is my only opportunity since it is my first tax return for my first year trading as a sole trader. This equipment was bought originally for Uni, but it naturally began to use this equipment soley for buniness use as I began to take on freelance work. If I am entitled to this, what proportion could I claim for? Is it the current value or a percentage of the original purchase price? If not am I getting mixed up with something else, or have I just got the wrong end of the stick?

Maybe I need an accountant, but I think my income is not quite high enough for afford the fees I would imagine - on this occasion at least! I plan to hopefully turn over more next year!

I would greatly appreciate any help anyone can give me.

Thanks in advance
Rich

CraftyTwinkle

Hi Rich

I really wouldn't want to offer any advice as I'm still learning all this tax stuff myself but I think that you may be able to put your computer equipment against 'Capital Allowances'.

The best place to start would be the HMRC website Type 'webinars' into the search box and click on the second result 'online seminars for businesses and the self employed'. At the bottom of the resulting page is a link to pre-recorded webinars. There's quite a wealth of information on there and should answer your questions. If not, they do live webinars as well where you can ask questions.

I hope that helps.

CraftyTwinkle

richimgd

Hi there,

Thanks for the post. I have read some more about this and also read the relevant sections in the understanding small business tax book I have. I realise you're right that it seems that it is capital allowance I should be claiming for. For some reason I have thought what I was wanting to do came under 'writing down allowance' which is something different. I am still going to do some more reading though.

It seems I might be able to claim for which is under the 'Other capital allowances:' section on the tax return where it mentions '100 per cent allowance' as I have read that computer equipment falls under this. As it would not have been brand new equipment in november 2011 when I started trading I was planning on claiming for 50% of the value.

If anyone could help clarify if this sounds reasonable that would be great


Here is a bit more info about my business and the things I would be claiming for.

• Sole trader looking at doing a tax return for 2011-12
• Started trading in November 2011.

My main question was about pre-trading expenses. Since I have equipment I use for business which I have not claimed anything for since they were bought before I was technically in business yet I read that I should be entitled to claim for at least some of their value.

I have receipts for about £1750 worth of equipment that I think I might be able to claim a proportion of their value for since I now use them for business use:

• Printer @ £250
• Computer components @ £800
• Computer peripherals @ £250
• Monitor @ £450

Cheers
Rich