Claiming for expenses - Self Employed

tugalis

Hi,

Firstly apologies to the admins if this is in the wrong board, Im asking stupid questions or it has been covered before :j

My Partner is just starting out as self employed running a craft and woodworking business. At the moment she is working 16 hours a week and we are hoping for her to make around a few £1000 in the first year (Im ever the optimist lol).

My question is to do with self assesment and what can be claimed back. A few years ago I was self employed, full time and earning good money so I claimed alot back for items like fuel, tools etc however this was a few years ago and I know the tax laws have changed alot. If she doesnt make over the minimum tax threshold (£9500 or whatever it is now) can she still calim for diesel, materials etc? Does this threshold only apply to Paye? Do you have to have made a certain amount before you can claim for anything?

If there is anything else you think I should look into or be aware of then please dont hesistate to tell me....

Many thanks for the help in advance!!

T,

Suarez

See the HMRC website for a list of what can bw claimed.

She would still allow for as many expenses/reliefs as possible even if she is making a loss or under the threshold as losses from previous years can be offset when a profit is made.

w211

These are questions aimed at an accountant, hopefully one will come along and answer your query! Or maybe you had one when you were self-employed you could ask for advice.

As far as I know, it's everything you need to use for your business. For motoring expenses, I believe it's a set rate per mile you do for business use. If a (spare) room is used in your house for your partners business, then you can claim a proportion of electricity/gas used for heating and lighting - this is where the accountant comes in!

I would assume the threshold would cover all your income, PAYE and the profit you make from your business. A P60 from your PAYE job, would be useful for the accountant to work out how much tax you've already paid, and how much you'd need to pay from your business.

nomunnofun

tugalis wrote: »

Hi,

Firstly apologies to the admins if this is in the wrong board, Im asking stupid questions or it has been covered before :j

My Partner is just starting out as self employed running a craft and woodworking business. At the moment she is working 16 hours a week and we are hoping for her to make around a few £1000 in the first year (Im ever the optimist lol).

My question is to do with self assesment and what can be claimed back. A few years ago I was self employed, full time and earning good money so I claimed alot back for items like fuel, tools etc however this was a few years ago and I know the tax laws have changed alot. If she doesnt make over the minimum tax threshold (£9500 or whatever it is now) can she still calim for diesel, materials etc? Does this threshold only apply to Paye? Do you have to have made a certain amount before you can claim for anything?

If there is anything else you think I should look into or be aware of then please dont hesistate to tell me....

Many thanks for the help in advance!!

T,

When you say 'make around a few £1000', I presume that this is after expenses?

Your partner can claim for all the expenses that she incurs wholly and exclusively for her business. Some would have the effect of reducing her profit, some are claimed in a slightly different manner where they are depreciated in the form of capital allowances. Motor expenses can be claimed on an individual basis i.e. fuel, tax, repairs insurance OR a set 45p per mile for the first 10000, 25p thereafter.

The problem would be if she does not earn enough profit to pay tax e.g. she could have a net profit of £5000 without claiming any expenses or £2000 when claiming everything. None of these options give rise to a tax liability.

She needs first to register with HMRC - that would be the first step.

chalkie99

I worry about your use of the term "claim back".

She can offset the costs of genuine business expenses against her trading profits but if her profits are less than the tax threshold there is nothing to "claim back".

Contrary to some peoples beliefs the taxman does not pay for your fuel or equipment.

ourtrudes

Hi,

My partner has just gone self employed opening his own Electrical Contracting company. He is currently a sole trader and prior to this, we were in receipt of Job Seekers Allowance. I am now in charge of book keeping and accounts have a few questions.
In order to keep accounts for April 2013- April 2014, I have been told to put our fortnightly JSA payments down as income as these are apparently taxable. As these can be taxed, am I also able to put forward the fuel receipts used to travel to and from the job centre on these dates? Also, for a good two three months prior to our going self employed, my partner was rallying around daily looking for work and future clients in turn, building the clientèle we needed to do this. Can these fuel receipts also be used? My final question being, as we wanted to start small and not venture into much debt by getting set up loans, we were lucky enough to have a family member borrow us the money to purchase some of the necessary equipment needed to start this business. Some of the items were purchased by this family member and the invoices have their names on them. Can I still use these? Even though they have not been made out to the business? Any help greatly appreciated. Thanks!

thewad

If your profit for the year is below your personal allowance...about £8000 for a married man/woman.....then you won't be able to claim anything back because you won't have to pay tax.
My taxable profit usually works out about 50% of turnover.

Suarez

thewad wrote: »

If your profit for the year is below your personal allowance...about £8000 for a married man/woman

No it's £10,000 come April

.....then you won't be able to claim anything back because you won't have to pay tax.

Claim what? You should still produce the same set of accounts and include all allowable expenses whether you are under the threshold or not.

My taxable profit usually works out about 50% of turnover.

See answers in bold...

zygurat789

Quote:
Originally Posted by thewad
If your profit for the year is below your personal allowance...about £8000 for a married man/woman

No it's £10,000 come April

.....then you won't be able to claim anything back because you won't have to pay tax.

Claim what? You should still produce the same set of accounts and include all allowable expenses whether you are under the threshold or not.

My taxable profit usually works out about 50% of turnover.

See answers in bold...


We are currently reporting 2012/13 income to HMRC on tax returns.
The personal allowance for this tax year which the on-line tax return system will use is £8,105. Next tax return by January 2015 will be for 2013/14 when the personal allowance is £9,440. From 5 April 2014 the PA is £10,000.

Suarez

Opening post says they are just starting out so it's going to be 9,440 or 10,000 depending on whether they get started now or after April..

[Deleted User]

ourtrudes wrote: »

Hi,

My partner has just gone self employed opening his own Electrical Contracting company. He is currently a sole trader and prior to this, we were in receipt of Job Seekers Allowance. I am now in charge of book keeping and accounts have a few questions.
In order to keep accounts for April 2013- April 2014, I have been told to put our fortnightly JSA payments down as income as these are apparently taxable. As these can be taxed, am I also able to put forward the fuel receipts used to travel to and from the job centre on these dates? Also, for a good two three months prior to our going self employed, my partner was rallying around daily looking for work and future clients in turn, building the clientèle we needed to do this. Can these fuel receipts also be used? My final question being, as we wanted to start small and not venture into much debt by getting set up loans, we were lucky enough to have a family member borrow us the money to purchase some of the necessary equipment needed to start this business. Some of the items were purchased by this family member and the invoices have their names on them. Can I still use these? Even though they have not been made out to the business? Any help greatly appreciated. Thanks!

I think, by definition, if your husband was signing on as unemployed at the time, the expenses you refer to were not wholly and exclusively incurred in performing his employment duties. :cool:

As regards to reclaiming costs for machinery, only capital allowance can be allowed for. He needs to calculate this based on the date & price he paid for them.

If he's not paid for them, then there is nothing to allow!
Perhaps he could lease them from his family member? The owner should notify HMRC accordingly of any income being received.