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Questions about tax free expenses - self employed tax return...


Hi
Sorry for any stupid questions, I'm not sure why I can't find the answers I need, I must be missing something. I am a videographer/photographer/composer. This last year I only made £14,000, and the tax free allowance is £12,570, so I would owe tax on £1430.
I have bought quite a lot of things this year for my business - A Laptop worth £5000, a camera and lens worth £3000, and lots of software for composition worth about £2000.
Are all these things able to be deducted and can they somehow be spread over multiple years, not just the tax year I bought them?
Can I carry any of these tax free allowances forward to next year, and how? Because it's a lot of money I spent!
Thank you very much
Comments
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They can all be claimed, although if there is any private usage, the amount claimed can only be the business proportion. Do you prepare your accounts on the cash basis? If you do, you claim for these items in the year you paid for them. You can't claim part. If you prepare accounts on the traditional basis, you can treat at least the laptop and the camera as assets qualifying for capital allowances. Claim what you need to in the year you bought them, and carry the balance forward (but you can only write that down at 18% per annum). The software would normally just be claimed like any other business expense. See https://www.gov.uk/capital-allowances1
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delmonta said:
Hi
Sorry for any stupid questions, I'm not sure why I can't find the answers I need, I must be missing something. I am a videographer/photographer/composer. This last year I only made £14,000, and the tax free allowance is £12,570, so I would owe tax on £1430.
I have bought quite a lot of things this year for my business - A Laptop worth £5000, a camera and lens worth £3000, and lots of software for composition worth about £2000.
Are all these things able to be deducted and can they somehow be spread over multiple years, not just the tax year I bought them?
Can I carry any of these tax free allowances forward to next year, and how? Because it's a lot of money I spent!
Thank you very much
And as far as business expenses are concerned a lot will probably depend on whether you use cash basis accounting or not.
You may find this a useful read.
https://www.litrg.org.uk/tax-guides/self-employment/what-business-expenses-are-allowable/what-capital-allowances-can-i-claim1 -
The software, in my view, can be claimed as an expense which would bring the profit to 12000. Accordingly it would be silly to claim anything on the laptop and camera this year.As said previously, carry this expenditure forward and claim 18% next year, 18% of the remaining balance the following year and so on ……0
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Jeremy535897 said:They can all be claimed, although if there is any private usage, the amount claimed can only be the business proportion. Do you prepare your accounts on the cash basis? If you do, you claim for these items in the year you paid for them. You can't claim part. If you prepare accounts on the traditional basis, you can treat at least the laptop and the camera as assets qualifying for capital allowances. Claim what you need to in the year you bought them, and carry the balance forward (but you can only write that down at 18% per annum). The software would normally just be claimed like any other business expense. See https://www.gov.uk/capital-allowancesSo the only way to spread these costs over multiple years is to switch to traditional?0
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purdyoaten2 said:The software, in my view, can be claimed as an expense which would bring the profit to 12000. Accordingly it would be silly to claim anything on the laptop and camera this year.As said previously, carry this expenditure forward and claim 18% next year, 18% of the remaining balance the following year and so on ……You say it would be silly to claim anything on the laptop and camera this year, do you mean I could claim for them next year even if I bought them this year? Can it work like thatI've read so many things online, I don't know why I'm finding it hard to find clear info on this, I must be missing something!0
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Dazed_and_C0nfused said:delmonta said:
Hi
Sorry for any stupid questions, I'm not sure why I can't find the answers I need, I must be missing something. I am a videographer/photographer/composer. This last year I only made £14,000, and the tax free allowance is £12,570, so I would owe tax on £1430.
I have bought quite a lot of things this year for my business - A Laptop worth £5000, a camera and lens worth £3000, and lots of software for composition worth about £2000.
Are all these things able to be deducted and can they somehow be spread over multiple years, not just the tax year I bought them?
Can I carry any of these tax free allowances forward to next year, and how? Because it's a lot of money I spent!
Thank you very much
And as far as business expenses are concerned a lot will probably depend on whether you use cash basis accounting or not.
You may find this a useful read.
https://www.litrg.org.uk/tax-guides/self-employment/what-business-expenses-are-allowable/what-capital-allowances-can-i-claimThis is what I'm mostly confused about0 -
No, you can't claim expenses in the tax year that suits you best. If using cash based they must be claimed in year of spend, if accrual based spread over their life through use of capital allowances.
I'm not really sure where the confusion is coming from.
What you can do, if you're cash based, is delay invoicing customers so the invoice receipt falls in the tax year which suits you best.1 -
uknick said:No, you can't claim expenses in the tax year that suits you best. If using cash based they must be claimed in year of spend, if accrual based spread over their life through use of capital allowances.
I'm not really sure where the confusion is coming from.
What you can do, if you're cash based, is delay invoicing customers so the invoice receipt falls in the tax year which suits you best.So the only way to spread expenses over the years is to change from Cash basis to accrual basis. I have always used cash basis and been told that's best for my situation, so I was reluctant to change. I am wondering if it would be worthwhile me changing just for this, as in the future I doubt I'll have as many high expenses in one year0 -
I think that you are getting confused.I my previous post I stated that it would be silly to claim capital allowances on the two items which are designated as capital because your profit is already below the personal allowance.Accordingly you CAN claim NIL capital allowances on the laptop and camera this year and CARRY FORWARD the full cost to the following year as I explained earlier - read that post again.
Given the questions are you absolutely certain that what you submit to HMRC will be correct? If not, I would strongly recommend that you seek professional assistance. Their fee could save you more in the long run!2 -
[Deleted User] said:I think that you are getting confused.I my previous post I stated that it would be silly to claim capital allowances on the two items which are designated as capital because your profit is already below the personal allowance.Accordingly you CAN claim NIL capital allowances on the laptop and camera this year and CARRY FORWARD the full cost to the following year as I explained earlier - read that post again.
Given the questions are you absolutely certain that what you submit to HMRC will be correct? If not, I would strongly recommend that you seek professional assistance. Their fee could save you more in the long run!But thanks and yes I could get an accountant but I am not making that much money and it's fairly simple, maybe 10 invoices for the year, so I don't see much reason to get an accountant, apart from just understanding the best way to deal with these expenses0
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