Tax and things able to claim back for small biz

seaneylad

Hello

Currently working full time 36h week on a salary.

But during covid due to limited overtime I started buying pallets of coal and logs and bought a van to do delivery's over the weekends for some extra income. Not huge profit margins but anything helped 

I understand I only pay take on the profit I have made so can sort that. What could I claim back to help limit this? Milage in the van, any vat etc in any of the large pallet purchases etc? Not sure what I can and can't do as I am already in full time work. 

Just doing some digging and it'd hard to find info if you already work and it's not a full time sole trader style role 

Thanks 

tacpot12

See this link for details of the expenses you can claim: Expenses if you're self-employed - GOV.UK (www.gov.uk)

It doesn't matter that you are already employed, your self-employment is a self-contained business with income and expenses incurred by that business. 

You can't reclaim the VAT you  pay on goods unless you charge VAT. This link might help: How does VAT work and how does it work? – Entrepreneur Handbook
 

Sandtree

To recover VAT you must be registered for VAT which means you charge VAT. You are presumably charging your customers more than you paying for the goods and therefore you'd be worse off being VAT registered unless all your customers are VAT registered themselves and buying for business purposes or what you are selling is zero rated.

Say you buy the logs at £100+VAT per pallet (£120) and sell them for £150+VAT (£180) would mean £50 profit and £10 to the tax man for VAT. If you arent VAT registered then its £60 profit and nothing to the tax man for VAT assuming you still sell them for £180 total to your customers. In both cases the profit will then be subject to your income tax.