Self Employed Cash Basis Accounting - Some Expenses Questions

northsoul

Hi there,
I do my own accounts for my self employed sound business.
I use cash basis, earn under £50k per year and am not vat registered.

For 2014-15, I have bought a number of things associated with my work and I am just trying to determine if I can count all of these as expenses. I know I should probably get an accountant but I quite like doing it myself, any help is appreciated.

I have bought sound equipment and a macbook pro which I will be counting as expenses. Also I bought specific outdoor clothing, boots+clothing and I know that is to go against expenses too.

I often do work with a company where I have to get a taxi to their base, I charge the taxi fares against expenses too. This is correct?

* I went home for Xmas to my folks and paid for the flights myself, however I did some work when I was home for a company I used to work for. Am I correct that I can claim the flights back too as I was working some of the days?
* I recently went away for a few days, hired a car and stayed in a reasonably cheap accommodation with my partner. While away I was doing some personal sound work for my business, can I claim these costs too and also the petrol costs?

Thanks.

Pennywise

northsoul wrote: »

* I went home for Xmas to my folks and paid for the flights myself, however I did some work when I was home for a company I used to work for. Am I correct that I can claim the flights back too as I was working some of the days?
* I recently went away for a few days, hired a car and stayed in a reasonably cheap accommodation with my partner. While away I was doing some personal sound work for my business, can I claim these costs too and also the petrol costs?

Of course you can't. Your motivation for these journeys was private. You didn't have to travel for business purposes. The fact you did a bit of work whilst there is irrelevant. You can't turn a private trip into a business one just by doing a bit of work there.

sheramber

You can claim for protective clothing but not for ordinary clothing that you wear for work.

Cook_County

I am not sure why you are using the government's weirdo cash basis, but you need to learn about the Samadian case to decide if you can claim taxi fares. In which country is "home" incidentally because you'll have to look at the tax treaty between the UK and that country to figure out who has the right to tax the income earned there.


Are you filing on the arising basis?

northsoul

Scotland is home so we play by the UK tax rules.

northsoul

Pennywise wrote: »

Of course you can't. Your motivation for these journeys was private. You didn't have to travel for business purposes. The fact you did a bit of work whilst there is irrelevant. You can't turn a private trip into a business one just by doing a bit of work there.

Conversely I could say I went up primarily for working reasons and then also visited relatives while in the area, who can argue against that?

northsoul

Cash basis seems much easier than the other way for me.

Pennywise

northsoul wrote: »

Conversely I could say I went up primarily for working reasons and then also visited relatives while in the area, who can argue against that?

In the case of a tax enquiry, it's not what you say that matters. It's what evidence you can produce. So what were the primary working reasons that took you abroad that just happened to accidentally be close to relatives? And how many days were you mostly working with those local business associates compared to how many days you were mostly with your relatives. Presumably you have the emails/paper trail of arranging business meetings beforehand that you'll be happy to produce to the tax inspector to prove that the motive and primary purpose of the trip was business, that you had to stay for as long as you did due to the number of business meetings and that you only saw your relatives in the time between these regular business meetings! :rotfl:

purdyoaten

northsoul wrote: »

Conversely I could say I went up primarily for working reasons and then also visited relatives while in the area, who can argue against that?

Yes - but you asked the question, were given the absolute correct answer and now wish to query that answer.

There is a thread on the cash basis just below this one - the advice is to avoid the cash basis.but is is your decision.

northsoul

Are you not allowed to query an answer if it is to do with tax? :rotfl:

Cash basis seems much easier for me, I don't need capital allowances etc. I didn't read anything in that thread that suggests cash basis is any worse than the other way of doing it.

Thanks for the reply Pennywise, there is definitely no way I could prove that so this answers that question!

I presume however that the trip I made with the hired car can be claimed against as I was doing some recording.

sheramber

I think again it would depend on how much time out of the few days was spent recording.

Also you cannot claim for any expenses for your partner, such as accommodation etc unless a partner in the business.