parking fee & self employed

catoutthebag

Being a bit thick today. I'm. A self employed sole trader.
Sometimes I have to pay for parking. I add the parking ticket to my invoice with various companies who add it on to my total taxable pay.

So do I put this down as a taxable expense on my return or just deduct it from my total turnover. ..I've paid from my own pocket and then got it back effectively.

Thank you

Darksparkle

Declare the total income you receive and claim parking as an expense.

chrismac1

No netting off!

This is a key principle of accounts and tax. It can matter big time for businesses which have netted off and think, wrongly, that they do not need to register for VAT. Then along come HMRC, rewind the netting and - Whammo! - a big bill with no real way for the business to recover it.

catoutthebag

From the 2 replies I'm still none the wiser

TheCyclingProgrammer

catoutthebag wrote: »

From the 2 replies I'm still none the wiser

I'm not sure what was unclear from the two previous posts.

If you have a tax deductible expense like parking you should declare it as such.

If you're also able to recover this cost by recharging it to your client then that should be included in your turnover because that is what it is.

The net effect is you don't get taxed on the amount you charge your client (assuming it's the same as the original expense) but as pointed out above that doesn't mean you should just net it off (ie not include it in your turnover or expenses) or you will be underreporting your turnover which could have implications on things like crossing the VAT registration threshold!

Even if you don't recharge the cost it still goes down as an expense.

[Deleted User]

catoutthebag wrote: »

Being a bit thick today. I'm. A self employed sole trader.
Sometimes I have to pay for parking. I add the parking ticket to my invoice with various companies who add it on to my total taxable pay.

So I put this down as a taxable expense on my return.

Thank you

In fact, having deleted the last sentence or so and one other word, your post is correct.