Self Assessment Tax Return Claiming Loan Money

Ronkey

I wonder if anyone can help me here.
I’m doing the year end accounts for my husband’s small cleaning business. Typically left it to the last minute again. :eek:
I’ve been doing the accounts for 7 years now so understand fairly well, except the issue of loans.
So, my husband has taken out a loan to pay for various business related things.
I have read the Gov website self-employed sections and took the information to say that when you take out a loan, you can only claim back the interest paid back on the loan, and not the loan repayments.
I also took it to mean that you can’t claim back that loan money which was spent on business related things, which doesn’t make sense…
As an example:
£1000 loan taken out to buy business related things (which are fully claimable).
Monthly repayments of £55 which includes £5 interest.
To me, you can claim back the £1000 spent on products, but not the monthly repayments of £50 (because that’s like claiming it back twice), however you can claim back the £5 per month interest on the loan.
:huh:
Can anyone who’s had experience tell me if this is correct?
Thank you!

Mattygroves2

Your understanding is correct - claim the expenses either through capital allowances or normal revenue depending on what they are.

Then claim the interest under interest on allowable loans (assuming he is a sole trader). No different to interest and charges on a business overdraft.

Ronkey

Oh that's great.
Thanks for your help!