SELF-EMPLOYED EXPENSE BASICS - WHAT CAN YOU CLAIM?
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- Опубліковано 7 чер 2024
- Wondering what expenses you can claim in your tax return as a self employed business owner?
In this video Dan runs through the basics of what expenses you can claim as self-employed.
Topics include:
What expenses you can claim as self employed
Self-employed travel expenses
Self-employed working from home costs
Self-employed training costs
Self-employed entertainment
List of self-employed expenses
How you claim self-employed expenses
Self-employed capital allowances
..... and more!
Our self-employed start up guide
www.heelanassociates.co.uk/se...
HMRC internal manual
www.gov.uk/hmrc-internal-manu...
You can see more about what we get up to on the following:
LinkedIn (Dan Heelan): / danheelan
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Podcast: heelanhub.co.uk The HeelanHub Podcast, a show for small business owners.
Join our mailing list for tax tips at: www.heelanassociates.co.uk
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Web: www.heelanassociates.co.uk
Call: 02392 240040 Email: info@heelanassociates.co.uk
00:00 Intro Self Employed Expenses
01:15 Wholly and Exclusively
02:05 Small List of general expenses
02:25 Use of Home expenses
04:10 Vehicle and travel expenses
04:45 Clothing expenses
05:58 Medical expenses
06:30 Entertainment expenses
07:55 Tax on profits
08:12 Keeping good records
08:38 How to claim
You've helped me so much thank you I've just been going over a year and a half as a sole trader so I'm coming up to doing my first tax return I was worried but your videos have helped
Glad they helped Zoe!
Fantastic advice! I could watch and listen to you all day!
Thanks! Glad it helped
Thank you Dan.That is very clear and helpful. Merry Christmas. Great health to all.
Merry Xmas to you also!
Hey Dan, thank you so much for the info, I've been tearing my hair out up until now.
Glad you found it useful Liz!
Thanks for your help, mate.
Glad it helped!
great video thanks. would love to hear more about costs wise for use of a room for the buiness in our house, plus electric costs etc. not ventured into that yet and any costs im footing the bill when really i should be charging my buisness. thanks again for the info
We probably do need to do a new one on this. There is a classic video here for the self employed, although if you are limited this doesnt work: ua-cam.com/video/H8tP-rdT330/v-deo.html
Great advice. Thanks.
Glad it was helpful James.
Great content, thank you for making all these videos and breaking the process down. Would help if you are able to slow down as I have to replay over and over to take it all in :)
Glad you enjoy! Noted. One option is almost everything we record here is available in written format at heelanassociates.co.uk/blog
Brilliant video! Thanks
Glad you liked it!
He looks like Thomas tuchel
Amazing 😃 maybe not as intense
Thomas taxhel
Great video thank you for the clear and simple advise.
My question is, can I claim for a timber frame workshop I have built to store equipment and materials in and working on small jobs for my work as a carpenter ?
To answer this in detail would need more info, but in a general sense:
*A lot of the time you can't get tax relief for the 'building' itself, presuming it's built in the grounds of the house.
*You might get some relief on the 'internals' of the workshop
*You might get some tax relief on any 'running' costs associated with the workshop
Next time I'm your way it will be good to catch up. See you've. Started recording at the new office too.
The children should call you a UA-camr now you made 10k subs. Well done Dan
Ha yeah apparently now its 100k before they care..... kids eh?
@@HeelanAssociates given the current progress it will happen.
Hi Dan, I watched most of your videos and it has helped me a lot I just finished my HND and I am doing some self-assessment for friends, I was looking here and I didn't find any video on how to proceed if a courier or a taxi driver should record their rent car expenses? Could it be 100% relief or should approach as a capital allowance for CO2 emissions? Also if they do some job as an employee what is the Personal allowance for them? Would it be from the Tax code as PAYE? them less what they have used for the PAYE? Or a deduction from what they have used from PAYE less 12500 from self-employed? If you can do a video would be fantastic !! Please!
Hi Elis,
The car there are a couple of options, try this one: ua-cam.com/video/PPnzNvLp3k8/v-deo.html
Re tax in job, this one might help: ua-cam.com/video/v3T46yqqdcQ/v-deo.html
Hi Dan, love the videos, thank you!
I spend many months abroad every year, lots of different countries. I typically stay in Airbnbs. I'm a consultant in online English language learning and while I travel I meet people to get their perspectives on learning English. How much of these travel expenses are deductible, we're talking months of flights, accommodations, food, entertainment etc.? Thanks so much!
Glad you enjoy!
So difficult to say on this one, regular abroad trips can get messy if you are mixing long stays and or leisure time.
In principle if you have to travel for business the costs are generally allowable, say in a simple example you had to fly for a venue where you are consulting for a few days.
But you might need to do certain workings or apportionment if you start staying passed the work date for leisure or general living accommodation.
Sorry that’s not more specific but it’s such a case by case basis.
Hi Dan, thanks so much for this. For the first time in my 20 years as a self-employed person and you've been so helpful. I'm wondering though about my photography business' assets - cameras and lenses etc. Is depreciation allowable/deductable using the Cash basis, and if so...how would I calculate that? Really appreciate you, thank you!
Usually the depreciation is ignored effectively, as you get credit as an expense when you buy the equipment.
On a normal 'accruals' basis you have 'capital allowances' instead of depreciation as such, but on cash basis you count it as plain/normal business expenditure in the year you buy (subject to certain rules)
Hi Dan,
Thank you for this great content. Next year I will have significant training and business coaching expenses - can that also be offset?
Self employed training tax relief is a little minefield and not very helpful!
It's very different in a limited company. For most training for self employed, it almost needs to be a refresher or skills rather than something new.
Short explanation from HMRCs view point here: www.gov.uk/expenses-if-youre-self-employed/training-courses
Thanks great video. Quick one when it comes to business expenses for example - buying equipment for your business does it have to be purchased under your business name? Even when u haven’t started the business yet ? Or can it be claimed under expenses as long as u have the receipt.
As a self employed person you are fine to purchase before and enter into your records at start. The business name is more of a 'trading name' anyway, as 'you' are the business.
So just keep good records. Glad you enjoyed to video.
excellent!
Glad you enjoyed!
Excellent information! My question is can you claim expenses after you have submitted your self assessment or does it need to be stated within the form itself? Another question is how can you calculate expenses on gas, electricity if you have a home office such as a bedroom?
Expense claims **usually** need to be in a tax return. You can amend a tax return for ~1 year after, depending on when you submitted it and a few other things.
The home, this classic video may help ua-cam.com/video/H8tP-rdT330/v-deo.html
Dan, dan, dan ... I hope you like Alan Partridge.
A hypothetical for you, if I were a sole trader that had a youtube channel that was monetised and I were to purchase an item to review is that item deductible.
And lets say I buy an item for £100, 80 plus 20 at 20%VAT what do I actually end up paying for that item come the end of the year? Do I simply end up paying £80 for it once I reach years end and all the tax magic is done and processed as long as I have purchased the item for the sole purpose of reviewing it
It's a difficult one to say as it depends on what you did with it after! If it's effectively a consumable item, then usually would be deductible as a cost of the trade (so would reduce the profit you are taxed on).
Either way it's costing you money, it's just whether you get tax relief against it (which therefore makes it 'cheaper').
Hi Dan your videos are very helpful. I just want to ask if I can include some expenses related to my personal vehicle (car maintenance, valet) which I use for personal and business as well. Can I claim half of the expenses related to it? Thank you
Hi, have a watch of this one: SELF-EMPLOYED MOTOR EXPENSES EXPLAINED!
ua-cam.com/video/PPnzNvLp3k8/v-deo.html
Hi Dan! Thank you for the video. I'm doing my tax return for 2020-21 and I'm confused about expenses. I started renting a place in Aug 2020 and worked from home 100% of the time, I share a 2 bedroom flat with 1 person. At the same time, I signed up for universal credit first time in my life and they started paying my rent some of the months when I wasn't paid by my clients, so roughly half of the time in that tax period.
Now I'm doing my tax return and I don't know how to do my expenses. Can I claim part of the rent for the months when UC didn't cover my rent? What about council tax and bills? I only had UC pay for my rent, not council tax or bills. Thank you
Hi! Glad you enjoyed the video.
Universal credit doesn't go into your tax return at all, so pretend that didn't happen as far as that's concerned.
Expenses wise, presuming we are talking about sole trader, check out this 'vintage' video for some thoughts on the working from home options: ua-cam.com/video/H8tP-rdT330/v-deo.html
Hi love the video. I have a question please, I am a painter and decorator. If I buy paint brushes, rollers, dust sheets, small tools e.g. scraper, screwdrivers etc, what category would this come under? It’s not goods for resale as I’m not selling these to the client. Would they be office supplies/ equipment? Many thanks, much appreciated.
Honestly it doesn't make a massive difference from a tax perspective, some owners will use 'expensed equipment' or 'small tools'. Some will use a 'cost of goods sold' or 'materials'.
Great videos!
My question: I work in Construction, CIS and for agencies who charge me £20 a week - company margin. Now, when doing my self assessment, Do I calculate my income after the £20 deductions or before and then I add all the £20 deductions as expenses?
Sounds like that’s their charge. So that goes in the expense box. Income / revenue / sales box is before this amount is knocked off.
Hey Dan, thanks so much for the extremely helpful videos. Im really interested to delve into the rules regarding allowable Food/Drink that can be claimed as an expense.. I am a freelance photographer and often find myself out and about having to grab a sandwich/soup and a couple of coffees per day while im on the road etc.. what's the rules on these? how many per day? a max amount per day? Should I be logging in a spreadsheet every time I make these purchases and tracking which job/commission I'm working on when I make these purchases etc... Thanks again!
We should probably do a video on this (and or a blog) as its a long one to type in the comments.
There are no daily limits etc for self employed, but there are established 'rules' around when HMRC would expect a trader to deduct/when they would allow it, depending on where their 'base of operations is'.
Generally if the cost of the journey is deductible, it follows 'subsistence' is).
Some tips:
• You must be on a qualifying business journey (this is the tricky bit)
• Must be ‘reasonable’ - since 2009 there is no upper limit.
• HMRC expects you to retain evidence (receipts) of your expenditure.
• HMRC has some set ‘round sum allowances’ available to EMPLOYEES, for example of lorry drivers. There are no equivalents for the self-employed.
• You need to be travelling to an occasional/temporary destination and there is no normal pattern, or the journey is outside the normal pattern (such as a very early appointment).
Added to the video list...
@@HeelanAssociates incredibly helpful! Looking forward to the vid! All the best 🙏🏼
Thank you for the video.
I work from home but in my garage, I'm a florist - is this classed as a room please to be able to claim a percentage?
There is a cost to the garage so yes there could be a claim there. You’d need to consider in your calcs any house costs not applicable to the garage, ie if it’s not heated is a gas bill cost appropriate
Hello. Thanks for the info. Are there are any rules in respect of how high the percentage of expenses can be compared to the income? For example, if you are within a trade that has high material costs. E.g £500 invoice but £300 are materials. The trade is an Electrician.
Will the tax man question over a percentage? Have you seen this before?
Many Thanks
Publicly available 'rules', no. Internal markers / data with HMRC - for sure. HMRC have market data they can/do use in investigations.
For example, a taxi driver's fuel. They will have data on the average fuel to sale ratio, so if that doesn't look right on a return, may question the validity.
As to whether your example as an issue, it depends on many factors that would be difficult to comment here.
Hi Dan
Could you tell us if the mileage allowance will be lifted with the fuel price increasing , soon to be above what we can claim back.
Hasn’t yet but defo should be! Hopefully HMRC will act.
I'm using Xero as my accounting software. After I reconcile all of my expenses, do I still need to keep receipts for all my purchases? I'm using a business account for my expenses so it's the only thing that goes out of my account other than my wage (I'm self-employed). Also, I have a long term (4 years) finance agreement on some equipment that I bought for my business. Can I claim what I've paid towards the finance agreement each year from my annual tax? Thank you for all the helpful videos.
Hi Dan. Yes keep receipts but if you’ve uploaded this pics onto system, on theory you could bin em.
We tend to say just store ‘just in case’ though.
The finance agreement is hard to cover in a comment, but if it was used for the business it’s likely you can claim the interest as a tax deduction.
Hi Dan, thanks for your videos, they are very informative! I'm looking at going self employed but I have two 'business' - for example, I am a freelance studio musician AND a videographer so the clientbase and trade names are different (not registerd trade marks yet). So... how do I go about setting this up without merging the two?
Keep two sets of records, then report each trade of different self employed pages on your tax return.
Hello, please could you point me in the direction of which video I need to watch to work out the allowances for home and bills at home :)
Little bit out of date, but this 'vintage' video is the one: ua-cam.com/video/H8tP-rdT330/v-deo.html
Hi Dan, very informative. I am currently doing my return and have a question regarding uniform. Can I/do I claim for washing my work uniform? I think there is a flat rate for someone who is employed but I am a sole trader. Thanks
This one is open to interpretation- can you easily ascertain the cost of washing just that uniform?
Hi Dan, great video.
I am currently struggling on how to declare my taxes as most of my expenses are paid back to me (almost as if I have been refunded the money) from my clients - they pay my travel costs and sometimes they pay for specific equipment. I have this all logged separately from my income I just don't know the correct way to declare it. Any help would be more than appreciated. Many thanks, Ashleigh.
Usually with expenses being repaid you will show both the income and the actual expense youve paid, so it ends up being tax neutral really (say £150 on travel ‘out’ £150 repaid ‘in’). Then effectively you just have the tax on your other profits from the business.
In practice it can be more complex than this, but that’s the principle.
Hi Dan, Thanks for ur video. I start self-employed as a security officer. I travel from London to kent every day. what expansive I can claim?
Anything 'wholly and exclusively for the use in your business/vocation/profession' :- )
The travel is a detailed one, we should probably due a video on, is it has several established 'rules' outside of the above that can be tricky to navigate.
To keep it simple though, if it feels like commuting to a fixed workplace every day, travel costs are often disallowable. if you travel to lots of places on a temp basis (like a 'jobbing' builder) they are normally allowable.
Check out this 'vintage' video for some more info: ua-cam.com/video/XGcg1bvt_y0/v-deo.html
Hi. I am currently living in Cyprus but planning to come back to the UK in April (after winter) to start as a self employed courier. It seems the most efficient way to do this job is tramping ie:sleeping in the van or hotel/b and b. Can you clarify that the hotel costs (cheap of course) could be offset against tax. Also could you clarify that accountant cost could also be offset. Your videos are helping a great deal .
Hi Paul,
Accountants cost for sure. If hotel costs are effectively your living accommodation full time, its unlikely you will be able to claim those as a fully deductible business cost.
Hi Paul .
Second video I've watched today. Thanks for making it! If I'm creating a product and paying for its manufacture, can I claim that as an expense.
Secondly, when I sell products on marketplaces such as Etsy, they charge a listing fee, VAT, transaction charge etc. So I may sell something for £10, but after the fees get only £8. Is the income I declare the £10 or the £8, and if the latter can the £2 be expenses?
On the Etsy, you'd show:
Sales £10
Expenses £2
= profit (the bit you are taxed on) £8
On the product, yes usually, although depending when you sell the product, and if you are on a 'cash' or 'accruals' basis for self assessment, you might not necessarily deduct the cost in you accounts in the year you spend the money.
You are effectively creating stock, which the treatment for tax varies depending on cash/accrual basis.
@@HeelanAssociates Thanks for the reply!
What if you organise a small end of year party for your customers (to keep them long-term) and charge them £1 to attend. It seems that this £1* will have to be declared as income on the tax return, so in theory the cost of the event (that gave rise to such income) should be an allowable expense too.. does that sound feasible?
Whilst it sounds a plan on paper, there are a few routes this would likely be shut down by HMRC. It looks and feels like customer entertainment, so the likely outcome is HMRC will look to (at least) restrict relief of those expenses.
Hi, Thanks for your video.
Is a cost of good for resale is bussines expense?
( If yes, do I need to pay tax income if I always buy new products for sale for all my income?)
Thanky you in advance!
Have a watch of this one, explained here: ua-cam.com/video/meiBmOjQh0k/v-deo.html
Hi, do you need to fill self assessment straight away (after stop being selg employed) or you have time for it as usual untill 31 January?
Most of the time you can't submit that return until after the tax year anyway, so you'd have the normal filing deadlines. You don't have to wait to 31st Jan though, normally any when from around mid April year before that Jan is possible.
Bit of a different one, but I'm an independent Professional Dominant ("Dominatrix"). I have plans to buy furniture for use in my work, but realistically all the equipment and furniture I buy will also be used with my personal partners at some point. Would these still count as expenses?
Similarly, with a laptop or graphics card for my computer, I would be using them in my personal life also.
Does networking and taking classes to improve my skills come under business expenses?
That’s a really interesting set of questions actually, because your trade is fairly niche.
I think the furniture would need some thought, it’s probably not something I can answer here because I have a lot of questions about the specifics, but maybe possible.
The IT equipment would usually be fine.
On the networking and skills section, oddly much of this will depending on whether you are a limited company or not (presuming not as we are talking on a self employed video).
If not, you may find the networking is fine but anything related to training is difficult in as a self employed person unless it’s really a skills ‘refresher’. Again sorry all pretty generic as I’d need a detailed discussion to break it all down!
You mentioned website build, but what about branding work? Are logo design (by an external provider), brand guidelines and trade mark registration claimable business expenses?
They can be claimed, put it under marketing /advertising
@@MrDoM2K9 great news, thank you!
In short, yes. Have a read here: www.heelanassociates.co.uk/tax-trap-website-costs/
Hello Dan. Thank you for your excellent videos. My question is: As a UK sole trader and only employee working as a career coach, am I able to pay for private health and/or dental care as a business expense? - either partly or fully. Thank you.
The short answer to this one is sadly not. Business can pay but it won’t be tax deductible. Position is slightly different for a limited company.
@HeelanAssociates Thank you, Dan.
Hi Dan, hope you’re well. Quite a different one but I run an entertainment business where I need to attend music events to record footage. Would the tickets for this be tax deductible?
While we can’t give 1-2-1 advice here due to pro regs, it’s sounds like it could be possible. In theory no different to any other event entry required for business. There would be more questions to understand the context of what you are doing to be able to say either way however.
Hi Dan, im self employed for charities not earning much-circa 20k. Have you a video on what I should do about tax deductions for private pension contributions please?
We don’t but this may help www.litrg.org.uk/tax-guides/self-employment/pensions-and-self-employment
Hi Dan, I've just discovered your channel and will be watching more of your helpful videos. I have a quick question please. I have been employed till now as a trades person, I have now become a self employed subcontractor as a general builder and carpenter, can I bring all my tools I owned and was using while employed to my new selfemployed business as an start up expense, and how do I work out the value, would it be a depreciated valued based on a second hand cost? Many thanks Chris.
Most likely yes, have you seen this one? CAN YOU CLAIM EXPENSES BEFORE YOUR BUSINESS STARTS (SELF-EMPLOYED)?
ua-cam.com/video/LXwDuAzadsU/v-deo.html
You’d normally estimate market value, making use of eBay, Facebook etc.
@HeelanAssociates I just watched the video. Thanks for the info. I just subscribed. I look forward to watching more of your content.
Regards, Chris
Hi Dan, can I claim travel as cycle commuting (bicycle) miles? I have closed 36km round trip x 4 days/week. I understand 0.45p/mile for driving (car). Do you have any HMRC info on cycle commuting? With thanks, Alice
There is a flat rate mileage for bikes, but likely all business travel consider whether its claimable at all. See:
www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax
www.heelanassociates.co.uk/ha-137-travel-costs-for-the-self-employed/
quick question. Do you add up your earnings and deduct the expenses and only tax the remainder? Like I make 65,000 once everything (tools, materials etc) is added, 15,000 of that is expenses, does that just get deducted straight off the total amount and the remainder is then taxed?
Hi Colin, so in super top level summary its 'taxable profits' you pay tax on. So it *generally* looks something like: Sales/revenue - tax deductible expenses = profit you will tax on, before your own personal allowances etc.
Hi Dan - thanks for the very helpful video. My problem is that I don't see anywhere on my tax return that I can enter allowable expenses. Can you point me to what I'm missing, please? Many thanks.
I’m not sure what you will see on your screen, but you are usually looking for a box in the self employed supplementary pages.
Thanks Dan - the form eventually fixed itself! For whatever reason, the expenses section wasn't showing on the screen, despite multiple re-starts - the whole block was missing. That, and the fact that it suddenly reappeared, will forever remain one of life's mysteries. Thanks again, and sorry to have troubled you 👍
I hear lots of people saying they claim for food. Lunches while at work etc. I always thought this wasn't allowed but they've not had any issues. Can you explain the rules on this?
Sometimes you can.
Video on reason 1: ua-cam.com/video/QTuYkALo0SU/v-deo.html
Blog of thoughts 2: www.heelanassociates.co.uk/ha-137-travel-costs-for-the-self-employed/
Hi, I am a sole trader and have a question regarding utilities claim. I have 2, totally converted old bedrooms into work spaces and a dining room used mainly as office space, but I'm happy to call 50% use. So I have 2.5 rooms for work in a 7 room house, that's 35% work space. Can I then safely claim 35% of my gas, electric, council tax, water and broadband? Thanks for any help.
It's probably easier me to quote HMRC on this, they say:
"If you work from home
You may be able to claim a proportion of your costs for things like:
heating
electricity
Council Tax
mortgage interest or rent
internet and telephone use
You’ll need to find a reasonable method of dividing your costs, for example by the number of rooms you use for business or the amount of time you spend working from home.
Example
You have 4 rooms in your home, one of which you use only as an office.
Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).
If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7)."
As someone who came newly to the uk "last January" for work (self employed associate dentist) and started working in February when should i pay my taxes or do the self assessment?
Great video!
Have a read here www.heelanassociates.co.uk/when-do-i-need-to-do-a-tax-return
Glad you enjoyed the video.
@@HeelanAssociates 🙏🙏🙏
Hi Dan, thanks for the informative video. I'm a freelance translator intending to become a 'digital nomad' of sorts. I want to invest in a new laptop for that purpose. Could this be considered tax-deductible? I'd be using it "wholly and exclusively" for this work bar watching the odd youtube video etc. Thanks!
Whilst this isn’t direct advice, yes what you describe sounds like a fairly standard tax deduction for a ‘knowledge’ worker.
Great conversation. I'm finding myself begging for some structure to the videos, with contents detailed etc
Can you expand?
I would have just like the points punctuated and tracked with numbers and headings. Even if crudely done with post cards a pen or a whiteboard. Just so the useful conversation can be structured in my head for me. Hope that helps:)
Hi Dan, thank you so much for this video - really helpful. I'm a little confused about my current situation. I'm trying to buy a house but I started in self-employment just before the pandemic and therefore my income was affected through the past 2 years and they are my only existing tax returns. My mortgage advisor has recommended putting in my self assessment for 21-22 without claiming any expenses so that the average income of this and my previous tax return is better when going forward for a mortgage. Can I check that it is okay to do this as I'm uncertain that it is?
Yes it’s a sad situation to be in.
So, if no accounts are being prepared there is no law that says you have to claim every expense/tax relief. In that we’re true there would be tons of illegal tax returns as people frequently miss out!
BUT! Using the tax return that has artificially inflated profits on to gain a mortgage is likely to be seen as illegal. Fraud action section 1/2.
Hello! i am a sole trader, can i claim expenses even if i am not registered for VAT? where do i claim? thank you. Great videos!
So vat and expenses claims in general are two different areas.
Your claim for tax deductible expenses happens in your self assessment tax return each year, and this doesn’t matter if vat registered or not.
m.ua-cam.com/video/nXsS_k4MVlw/v-deo.html
Do you think an Audible subscription is allowed to listen to audio books for work ie psychology type books for a psychologist..
In principle yes, if it’s ‘wholly and exclusively’ used for business.
Hello, I hope you don't mind me inquiring, but I have a question. I work as a 3-D artist, and there's a course that could enhance my skills in core workflows and business practices for my field. Taking this course might potentially lead to a significant increase in my income. My main query is, if I aimed to swiftly cover the £10,000 cost of the course, could it be immediately considered a valid business expense for tax purposes due to its direct relevance to my business? I'm curious about this because I want to swiftly use my income to cover the course cost. However, I'm unsure whether I can allocate my income directly to paying for it, or if I'll still need to set aside a portion of my income for taxes
Training a self employed person is not a very favourable area im afraid.
Effectively if you are gaining a new skill, HMRC view it as 'capital expenditure' as its got a long term benefit, and there is no tax allowance for that type of expenditure.
Oddly not the same outcome in a limited company....
HMRC looked at this issue a few years back, and basically said 'yeah we are ok with it...'
www.gov.uk/government/consultations/taxation-of-self-funded-work-related-training
So short answer, sadly although it would likely be considered a valid business expense, there is no tax relief for that type of cost.
If you are employed but do freelance work it seems you can put that under 'any other income' section of form as opposed to self employed. expenses are also allowable there. Is it better to do that section or self employment.?
It depends on the exact situation, but in 99% of cases we see self employed pages would be the place. Plus you might want to access the 'trading allowance' so would need to use those pages.
Hi I’m in a business partnership and I want to set up another aerate business for myself to to a few days a week as a sole trader. Oviously I already have self assessment account so I need to register a my new sole trader business with hmrc or just fill self employment part of tax return out when I do my partnership accounts.
Thanks
You use same account and return you just complete the self employment pages as well. By sounds of it you are filing the partnership pages already so this is another set of pages.
When do you start taking track of expenses ? Do you start at the tax year
From when you start incurring they really. If it’s before you start to trade see here CAN YOU CLAIM EXPENSES BEFORE YOUR BUSINESS STARTS (SELF-EMPLOYED)?
ua-cam.com/video/LXwDuAzadsU/v-deo.html
I’m a little confused. So when you spend money on a business expense. You have to wait till the end of the tax year to get that money back for all your business expenses? Whilst you wait do you still pay tax monthly?
In self employment you both pay tax and get tax relief effectively at the same time, all done in a tax return, with 1 (possibly two) payments.
What about workwear that’s PPE such as tough work trousers, high viz jacket, safety boots etc
Yes usually fine.
Nice video, can you tell me please if payment for nursery from age 3 will be counted as tax relief when I will be self employed? Thank you
Sadly not :- ( They aren't 'wholly and exclusively' for the use of business - although probably feels like it!
You can set up a taxfree childcare account though www.gov.uk/tax-free-childcare
Hello thank you for your time, is it same situation with LTD?
I still find it confusing as have had different chats with people. I was of the thinking I’d pay tax on my profit therefore my materials cost £X and I sell painting for £Y so get £Z profit but he said would pay tax on what customer pays then I claim tax relied on the material’s. Would I actually pay tax on profit and also claim tax back on the paint I’ve bought?!
Hi there, not sure what you mean entirely here, as your initial assumptions sound correct. Your tax is on your profit.
As a sole trader can I claim the cost of my website, and how would I do this if it was designed in-house (by me)?
If it's designed by you, it's only really any hosting/software costs. You can't reclaim the labour as such.
Hi, I need some help !! I have expenses for which i don't have receipts... should I not declare them? I was wondering if screenshots of the transaction details on my online bank would count as proof...? thanks in advance
You don’t actually need all the receipts (vat issues aside), you just need records. Receipts are definitely best practice but if you have some other record it’s usually ok.
Example some business expenses are really hard to get receipts, like rocking up to buy some items at a car boot or Facebook market place.
I'm struggling to find any information of claiming for having a Garden cabin built for work purposes. Can a childminder claim this as a self employed person?
It’s a detailed answer really this one, but the short of it as it currently stands, is that in most business situations building a fixed structure like this is technically fine for a business to pay for, but there is no tax relief on it (due to way the rules interact).
Internally fitting it out though is a different story. Many parts of those costs will often be fine.
Hi can you please help and clarify...... Postage!? I run an online artistic business and post majority of my items. I offer free postage but I hide the cost of this into the item price by adding £5-£10 to the item price. I've recently been advised that I should be listing postage as an expense, regardless if its hidden or I ask for postage on top. I'm my mind my customers are paying for this?? I can't find clarity anywhere and I'm very confused. I'm a new business so need to get it sorted ASAP. Thank you 😊
Hi Jolie,
So how you show/if you show the charge to your customers doesn't matter, but you want to record the actual cost of the postage in your business book-keeping records to make sure you get the tax relief.
Hope that helps!
@@HeelanAssociates Thank you, yes I'm keeping records of everything. I just wanted clarification that postage is a business expense regardless of if I charge my customer or not? It just doesn't seem logical to me 🤷♀️ thanks
Hi Dan,
I’ve very recently gone self employed as a freelancer, I was just wondering, when filling in my expenses, am I to calculate the tax of said expenses or am I to us the accumulated whole amount?
You stick the amount you ‘spent’ on tax deductible expenses in the box. Return works out the tax.
Hi there, thanks for your video, it's really helpful. When you claim an expense, e.g. uniform for £100, do you claim back only the 20% VAT on that amount or the full amount?
If you are not VAT registered you reduce your taxable profits by what you paid for the expense.
If you are VAT registered, you claim (presuming you could) the VAT proportion in your VAT return and the rest of the value reducing your taxable profits (reducing your tax bill).
What about stuff like purchasing spectacles or a car (not a van).
Re car have a look at this one ua-cam.com/video/PPnzNvLp3k8/v-deo.html
Spectacles are a difficult one to get through, have a look here: ua-cam.com/video/B_9FER3djYw/v-deo.html
Hello Dan i have recently retired early as an employed electrician . I have 2 questions if you could kindly answer the first one is, I have gone on government website and entered a company name which it said was not used by anyone do i have to register this somewhere ? Second question is can i dip my toe in ie use the £1000 allowance and if and when i exceed this register with HMRC as a sole trader then . Thanks
Hi sorry about the delay in reply.
I was confused on first one, in terms of did you mean limited company?
When registering as a sole trader you don’t really log a business name, sometimes hmrc ask for one for reference but it’s not in a register as such.
They effectively deal with you as an individual.
Second question yes can dip toe and worry after £1000.
Do I need to be employed as an employee of my company to claim expenses or I can just do it as a director of the company? from my company bank account to personal bank account?
This vid was on sole traders, but in general if you’ve incurred tax deductible costs on behalf of the company they are likely claimable.
Great info that an accountant is tax deductible!!
**in most cases 😀
Calculating Broadband business usage when working in family home 🤯
Yes can be hard work! There are multiple ways to do it, rooms and hours is a good one.
hi Dan, can you claim food as expenses (Lunch) as a sole trader?
This may help www.heelanassociates.co.uk/ha-137-travel-costs-for-the-self-employed/
Hi i want to start trading in coins as a sole trader ... gold is vat free and also the coins are cgt free . So if i buy a gold sovereign for 350 and sell for 450 do i pay income tax on the gold because i have a business as a sole trader ? Do i even have to declare this on my tax returns as with ot being cgt free i can make asmuch profit as i want wothout declaring ? Also when i buy stock if i buy a house clearance of coins can i write my own recipets for cash paid to people and claim it as exspenses ? Any information would help Thanks .
Hi Sam,
This one is probably a little too detailed for us to answer in a comment here I'm afraid.
If you want some direct 1-2-1 answers on this, get in touch with our team and we have a consult service that can cover your specific situation.
Hi Dan, I’m a self employed and working for a company which does not give me any benefits. Is it ok for the company do not have any responsibility ?
It sounds like you aren't convinced your self employed? There should be no benefits if self employed, as you are in business in your own right.
If you feel you are actually employed, it's worth challenging this with your 'employer'.
I'm an audio engineer, registered as a sole trader. I've bought Software and hardware (in particular microphones) over this tax year. I bought them for business purposes. But there's nothing stopping me using them for personal reasons. Are they still tax deductible? I can't think of a reason why I would use them in a hobby capacity. It is pro equipment but couldn't be classed as industrial.
Sometimes minor personal use on business equipment occurs. If your clear intention and evidence suggests they are 'wholly and exclusively' for use in the business, then that is usually fine.
Think of it as a similar point with a laptop, you might buy for your business but you still might do your amazon shopping on it :- )
@@HeelanAssociates Cheers.
Hi i have a public sector job and am also a limited company director with my wife as shareholder. I do not take any salary from the company so I do not have P60 or paye reference no. My question is when I am filling self assessment and I want to claim expenses like mileage etc how can I do that? Without filling the PAYE reference the form runs into error and I cant complete self assessment.
Thanks in advance
Ash
If you mean the mileage on behalf of your own limited company, you usually do this as a claim in your company records, rather than as an income tax claim (so wouldn’t put it in the personal self assessment).
I have a question, I am claiming tax relief on my energy bills due to having to work from home due to COVID-19. I had some issues with Octopus Energy so they never billed me until nearly a year and a half after I moved in. So the date of my bill is 14 June 2021, and the bill covers the period 1 September 2020 until 13 June 2021. So, should I just claim the whole bill for the 2021/2022 year as that's when the funds became technically due, or do I have to work out how much I used between 1 September 2020 until 31 March 2021 and claim that portion? I am confused! : (
Depends on the basis you prepare your accounts. If you are on 'cash' basis its what you paid/when, under normal 'accruals basis' you'd use the dates to determine the charges you'd claim as an expense.
@@HeelanAssociates Thank you so much I am so happy you answered my query. I think I am going to do it the second way to mentioned as expenses will be more evenly spread etc. Thanks again! 😊
I drive my old car to different locations to move cars. Can I claim for the mileage or the fuel. Just a little confused as am getting different messages. Do I claim for fuel, oil changes etc or claim for mileage
Bit of a 'classic' video this one, but hope it helps: ua-cam.com/video/XGcg1bvt_y0/v-deo.html
This may help also, we discuss the issue there to:
www.heelanassociates.co.uk/going-self-employed-for-sole-traders/
@@HeelanAssociates thank you
what books do you have on your shelf?
Loads of stuff! Enjoy business books, these are just some of the practical ones we have a spare copy to lend clients of some of the more helpful ones.
Everything from tax, to sales and marketing!
I’m a delivery driver not in my own car, in a van provided would my car insurance and road tax be deductible due to me driving to and from work?
It’s unlikely it you are just travelling to depot to pick up van. More info here www.heelanassociates.co.uk/ha-137-travel-costs-for-the-self-employed/
What do you mean by allowable or deductible. Let's say you pay someone's wages of 40k and your tax bill comes to 41k... does that mean you can remove the 40k and actually only pay 1k
So example, if you took in £100,000, and your wages were £40,000 (and tax deductible), your taxable profit would be £60,000. That's the amount you pay tax on at whatever the applicate rate.
If I’m a sole trader and I purchase a laptop for £2k exclusively for my business, I’m assuming I can claim this on expenses. If say I earn £3k profit as a sole trader, will I only be taxed on £1k?
Effectively yes that’s right. There are a couple of ways to technically claim the expense of the Laptop depending if you are doing your tax return on a ‘cash’ or ‘accruals’ basis (figures doing in different boxes) but yes.
Hiya, so I work as a cammodel would I be able to claim makeup (any other beauty treatments such as hair nails), lingerie/bikinis and internet in my taxes? As I make my money off of how I look?
This one is a video in itself!
It’s difficult to explain in a short comment, but generally if there is an enduring personal benefit it won’t count as ‘wholly and exclusive’ for your business, and therefore won’t be tax deductible.
So if you imagine, Botox etc would fail this test - you can’t remove it when your not on camera. Same with a hair cut.
But if you had styling or wig and make up for one camera shoot for example it would be ok.
It’s a little similar with make up etc, separate extreme shades might be ok but general make up maybe more difficult unless you could demonstrate how you kept a separate bag and the differences. So much to talk about here, and several tax court cases on the subject!
When I order stock and pay for this to be delivered to me, do I class the delivery costs to me as expenses or can I just add it to the cost of my stock? So for example if I ordered stock worth £100 and it cost me £10 to have this delivered to me, do I write it down as ‘stock cost me £110’ ?
You could arguably do either, but it usual under accounting standards to add cost of delivery to the stock price (so £110 in your example).
@@HeelanAssociates thank you so much! Google had no idea what I meant, been trying to find an answer to this for months but no one seemed to know lol thank you! :) 👏🏻
@@HeelanAssociates Can I also do this with postage costs when sending the product to the customer?
Sorry to be a pain, I forgot to include that in my first comment 🤦🏻♀️
Hi Dan, do you have any idea why my total allowable expenses seem to have no impact on my tax settlement figure? I’m basically just getting my tax back and I feel like I’m missing something!! Please help!!!
I should have said, I’m also self employed
They should have an impact. Biggest misunderstanding we see on this one is an expectation of the whole amount paid for expenses coming back, but that’s not how it operates. More here: WHAT DOES TAX DEDUCTIBLE ACTUALLY MEAN?
ua-cam.com/video/nXsS_k4MVlw/v-deo.html
That’s confusing. I bought a motorbike to do courier work on. I also use it very sparingly to get around on. Can I not just claim for the percentage I use for my business? Like, 90% of what it cost?
Hi Stuart,
You have a couple of options (in general) for this, one is roughly as describe, see this 'vintage' video: ua-cam.com/video/XGcg1bvt_y0/v-deo.html
@@HeelanAssociates thanks
What if your business expenses are more than you owe in tax? Is there any way of claiming the extra back, or is that just very wishful thinking?
You can usually carry that loss forward and set against other profits. So effectively that is claiming the tax back in future years.
If you have an employed job as well it could also be possible to offset this loss there and get a tax repayment.
A lot depends on your situation and what tax you've paid.
How much does it cost to ring HMRC from abroad?
I guess it depends on your phone tariff?
If I hold a meeting in a cafe to talk about work with a client, it's not entertaining, it is 100% focused on discussing work for profit to the business. It's also significantly cheaper than hiring a meeting room (that would have coffee laid on). So is the cost of the coffee a business expense? Asking because I have to do this a bit to build the business.
What you describe is a business expense, but it’s entertaining so not tax deductible. Might not feel like it, but it’s the HMrC view on it www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45010
But if I’m by myself, drinking a coffee to prep for a meeting, then it’s potentially ‘subsistence’, and if my client were also to pay for their own coffee, it could also be ‘subsistence’?
work wear is allowed if it has the company logo.
That would uniform in that case, which is generally allowable ;- )
if you buy a laptop as business expense, is the total cost will be the tax relief?
This may help WHAT DOES TAX DEDUCTIBLE ACTUALLY MEAN?
ua-cam.com/video/nXsS_k4MVlw/v-deo.html
Does an accounted need to be pacific for a business ?
ie: courier business.
How do you mean? You you elaborate?
@@HeelanAssociates Would someone need an accounted who knows about the type of business they are running ?
Hi I’m a childminder, and I’ve spent all Sunday on training plus the fee of the course. Can I claim my time?
Your time, sadly not. The training course, with the changes that happened recently, is likely www.gov.uk/expenses-if-youre-self-employed/training-courses
Hello, could you tell me are dentistry costs allowed to be claimed back, fillings, crowns etc. I’m a SE Teacher, it’s important that I can smile!
I feel I might need to a vid on this type of thing, pops up a lot and hard to answer in a comment, but . .
. . Short answer is generally no not claimable. This is because you fail the
‘Wholly and exclusively for business test’ because there is a clear personal benefit to looking good - you can’t remove the teeth when not on business :)
Lots of tax court cases and these issues, I should cover some.
@@HeelanAssociates thank you, I wonder if celebrities claim their dental work back and if so what justification do they give, I have an idea it’s linked with image, which would be the same for a Teacher and many other occupations, I would not be considering spending £1000 on dental work if it was for me personally, I’d go cheap and have them removed. I accept that HMRC wouldn’t accept this ha. Thanks again.
Hello Dan, a personal question here.
If i started trading sep 2022 do i have until October 2024 to register ?
ua-cam.com/video/qvEuc_TzMFs/v-deo.htmlsi=WJe7kiez9S5PEhtb this one may help
Is commuting to the office deductable?
Generally no. www.heelanassociates.co.uk/ha-137-travel-costs-for-the-self-employed/