Tax return - Expenses included in invoices

mister_tom

Hi all,
Please forgive the idiot question but this is my second year of tax returns and there's something I'm not sure about:

I'm self employed, and while I know there are certain things I can claim as expenses, what I'm not clear on is what to do about the expenses I have included in invoices. For example taxi journeys to and from work, when the client has told me to put it on the invoice. I've paid, put it in the invoice and been paid back. If I include it in my earnings then I get taxed on it, so do I include it in expenses (which doesn't make sense as I've already been paid back for it) or do I simply strike the taxi charge from the invoice and enter only the income. I assume the latter but I just want to check I'm not being stupid. It is a very strong possibility.
Thanks in advance.
T

Pennywise

You include it in your sales income

and you include it as an expense.

That results in a no gain/no loss outcome which is the reality.

mister_tom

And sales income is simply turnover, right?

Pennywise

mister_tom wrote: »

And sales income is simply turnover, right?

It's the total of the amounts paid to you by your customers, including for work done and expenses recharged.

TheCyclingProgrammer

Any recharged expenses to clients count as sales. You can recharge a client for anything regardless of its tax deductibility, so long as the client agrees. Think of them as two separate things.

1) You incur some kind of expense and recharge it to the client on their invoice thus increasing your turnover.
2) If the expense is tax deductible you account for it as such, thus reducing your taxable profit.