Self employed newbie - calculating allowances?

ioscorpio

Does the Self Assessment course cover what expenses are allowable, as I'm sure there was stuff I should have claimed for in 2006/07 but didn't, but I left everything to the last minute, got confused and handed in my return on 31/1/08

I became self emp in Nov 06, so put my trading period from then til 5/4/07

For 2007/08 is it best to put the trading year as 6/4/07 to 5/4/08 ot run it to month end of March 08?

fengirl_2

Nowhere will tell you what expenses you can claim as these are individual to each business. The law states that all expenses which are incurred wholly and exclusively in the business. As it is your business and you run it the way you decide, then you decide what is necessary to provide for the business.
If you have a separate bank account for the business and put all the income and expenditure through that, you wont miss anything.
Anything which you think you should have included for the previous year can be included now by writing to HMRC and asking to make an amendment to your Self Assessment, giving the details.
Its up to you when you make your accounts up to - but really there is no point in changing what you have done already.

ioscorpio

I've signed up for one of the free courses today and will sort out my self assessment form straight after attending it in May.

My expenses were straightforward as I was working for a company on a self employed basis, so was not running a business as such, but you here stories of people claiming all and sundry and only paying pennies in taxes.

Seaside1_2

Just a point - you cannot claim first year allowances on a car; i.e. 50% in tax yr 07/08 (regardless of % business use). You may claim 25% each year on a reducing balance basis. (Vans on the other hand and certain dual cab vehicles do qualify for first year allowances.)

I.e. if a car costs £1,000 you can claim £1,000 x 25% = £250 in yr 1, £750 x 25% = £188 in yr 2, £562 x 25%= £141 in yr 3 and so on.

fengirl_2

You were running a business! Thats what being self employed means. You really do need to keep accurate records and make sure all business expenditure is included.

ioscorpio

I have kept receipts for what I thought I could claim tax against, but there are probably things that I could have claimed that I did not know about.

I did not bother claiming any capital allowances as I was using an older car and existing computer equipment that I did not have any receipts for and only claimed £2 a week for using my home as an office. I have bought a new laptop this tax year and changed my car, so will be better prepared for this year.

jimclark1967

Seaside1 wrote: »

Just a point - you cannot claim first year allowances on a car; i.e. 50% in tax yr 07/08 (regardless of % business use). You may claim 25% each year on a reducing balance basis. (Vans on the other hand and certain dual cab vehicles do qualify for first year allowances.)

I.e. if a car costs £1,000 you can claim £1,000 x 25% = £250 in yr 1, £750 x 25% = £188 in yr 2, £562 x 25%= £141 in yr 3 and so on.

Another point worth noting is that the capital allowance you can claim on cars is capped at £3,000 per year even if 25% would be more than this. So in effect you'll get less than 25% in the early years if you buy an 'expensive' car worth more than £12K.

JC