Offset tax

[eventful]

It's that time of year again where we are all starting to think about the tax returns.

As a new self employed freelancer that can I offset against my tax?

 

tools,

PPE,

union fees,

 

what else?

[Modge]

travel for a start, meals whilst working (possibly - I'm not an accountant)

and thanks for the reminder, I should experiment with may be doing it before January for a change....

[Andrew C]

Accountants fees... :D

[David Lee]

a good place to start is at the inland revenue itself http://www.hmrc.gov.uk/sa/selfemp.htm .IIRC in your first year start up costs can be offset.

 

this help sheet may help http://www.hmrc.gov.uk/helpsheets/ir222.pdf

 

ALLOWABLE BUSINESS EXPENSES

Broadly speaking, you can deduct from your turnover all the costs

you incur for the sole purpose of earning business profits. But you

cannot deduct costs which you incur for a non-business purpose,

such as your own personal expenses or drawings. And you cannot

deduct capital costs, that is, the cost of buying fixed assets or

intangibles, such as goodwill, which last for several years (or losses

you suffer when you sell them). But you may be able to claim

capital allowances on these capital costs. Additionally, you cannot

deduct costs which are recoverable under an insurance.

Business expenditure is allowed in your accounts for a period if it

was incurred in earning turnover in that period, even if you are not

due to pay the money until later.

 

note the line "for the sole purpose of earning business profits" - it is very important.

[zonino]

you can offset the cost of meals that are incurred, within reason, I have some notes on this somewhere but I can't lay my hands on them at the moment.

travel

union fees

subscription fees (Broadcast, the stage etc)

tools,

PPE,

union fees,

SAFETY clothing (you can't claim other stuff)

if you have an office in your house that you use for work you can offset some of your tax against that off electricity bills etc

phone bills - usually done as a percentage unless you can work out business calls from personal

 

the best thing to do is put all your receipts into a ring-binder and do it monthly (you're more likely to notice if you're missing a receipt then) accountants will charge you more if they get handed a box of receipts than if they get a neat tidy ring-binder!

[leofric]

Bectu used to do a very useful guide to tax and the self employed

 

One they mention is your TV licence fee, you would need to be doing a reasonable amount of TV work though.

[Guest lightnix]

tools,

PPE,

union fees,

 

what else?

Whatever your accountant says (you do have an accountant, don't you :P ).

 

My annual accounts show the following classes of expense claimed against tax...

Loose tools and consumable materials

(

e.g.

PVC tape, Superglue, etc.)

Theatre, Cinema & Show Tickets

Records, CDs & Tapes

Video Expenses & DVDs

Photographic Expenses

Stationery, Printing & Postage

Computer Expenses

Subscriptions & Trade Magazines

(

e.g.

PSA, BECTU membership and a copy of

The Stage

each week)

Protective Clothing, Laundry & Cleaning

(PPE, steel toes, gloves, boiler suits, etc.)

Travelling Hotels & Subsistence

Motoring expenses

(a percentage is deducted from these, to account for personal use )

Use Of Home

(@ £12 per week)

Professional Insurance

Telephone

Accountancy Fees

Bank Charges

(inc. credit card interest)

There maybe others that you can claim and some you won't be able to, depending on your circumstances. Hotels & Subsistence within the UK have often been a bit tricky, although the current IR interpretation of the regs seems quite generous. Once abroad, anything and everything can be claimed for - every meal, sandwich, choccy bar and beer, so keep those foreign receipts!

[paulears]

Don't forget that vans are treated differently to cars - you can claim a proportion of a cars running costs, but all of a vans. The current interpretation used by the VAT people is that if it has seats behinds the driver, and/or windows behind, then it isn't a van? So crew cabs don't work!

[Pete McCrea]

Don't forget that vans are treated differently to cars - you can claim a proportion of a cars running costs, but all of a vans. The current interpretation used by the VAT people is that if it has seats behinds the driver, and/or windows behind, then it isn't a van? So crew cabs don't work!

 

Unless they have a payload of over 1T IIRC from the Volkswagen Crafter sales blurb....