Self employed - Sole trader Help

pault1501

I have just become self employed as a sole trader in the courier industry and I am having trouble understanding what I can and cannot claim and where to claim it from. I understand how to work out my taxes and NI. What I am having trouble finding out is can I claim any money back for the the van that I lease and the diesel I put in it?
I have estimated my van lease for the year at £8000 inc VAT.
I have estimated my fuel costs at £14000 for the year inc VAT.
I am NOT VAT registered as I wont earn enough to meet the threshold.

Any advice would be greatly appreciated.

Cheers Paul.

chappers

You can claim for both of those amongst a whole host of other things, very basically any genuine expense to do with your business.
It all gets set against your income at the end of the year when you do your tax return.
Very basically say you earn £30,000 in the year and spend £15,000 on running your business you will be taxed on £15,000 less your personal allowances.
If you are ever in doubt as to what you can claim as a business expense then contact the HMRC helpline and they will be able to tell you.
I would advise you use an accountant especially for the first couple of years until you have a grasp on it, it also frees up your time allowing you to get on with running your business.

fengirl_2

You do not claim anything - you include in your business accounts all the costs incurred in running your business. Ask youslef - did I spend this money for my busienss or for myslef and that wull give you a clue!
If you open a separate business bank accoutn and put all your inocme and expenditure through that, you wont miss anything. HMRC will not advise you on what expenses are to be included in your business as its your business.

chappers

Thats not strictly true, they won't tell you what you can allow but if you ring them and say " I have just bought a roofrack for my van so I can carry more parcels is this an allowable expense? "they will say yes. or If you say "I have just bought a roofrack so I can take the family on holiday" they will say no you can't. But basically if you ring them and ask them if something is an allowable expense they will tell you if it is or not.
But basically anything you buy(including services) to run your business will be allowable and the more seperate your business is from your personal life the easier it is.
e.g if your business has it's own office away from your home then buying a kettle to make tea would be an allowable expense.

Whereas if your business operates from your home, whilst in theory you could claim part of the cost of the kettle as an allowable expense, because you use it for business purposes for some of the time.In practice this is probably not going to wash with HMRC.

pault1501

Thanks for the replies so far.
I dont think I was clear enough of what I am trying to find out.
Ok for my van lease can I claim any amount of that money back? I already understand that I take my yearly income minus my expenses minus my taxable allowance to get my tax rate. Basically out of the £155 per week I pay to lease my van can I claim any of it back? Same for my fuel. Out of the £275 per week I spend on fuel can I claim any of that back?
Is my only option to become VAT registered to at least get some of these outlays back?
I assume I cannot claim mileage - the 40p for first 10000 miles then 25p thereafter???
Sorry if I seem a bit dumb. There should be a very simple site for people like me hahaha!!!
Again any help is much appreciated.

fengirl_2

You cannot claim anything back.
What you do is include in your accounts all your busines expenses and this reduces your tax bill. In your accounts you include all the costs of running the van, including fuel, lease charges, parking, etc etc. For tax purposes you would need to add back any private use of the van costs (lease payments plus fuel), eg going to Tescos for the weekly shop. If there is no private use, you add nothing back. You cannot include the 40p/25p a mile allowance if you are claiming the actual cost of running the van - its either one method or the other.
If you registered for VAT you could reclaim the cost of VAT paid out, but this would not affect your income tax liability.

freddykruggar

check out this forum, its especially for owner driver couriors like you and me
these guys know all there is to know about babysitting parcels

http://codforum.org.uk/forums/

stphnstevey

I beleive you can claim leasing costs of a vehicle, but if you purchased the vehicle in company profits you couldn't?