Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Apportioning expenses » Go to message
Hi,

You mentioned you did not have a phone until you started self-employment. In your scenario it may be better to consider the following from HS222 Self Assessment helpsheet: How to calculate your taxable profits.

Under allowable business expenses for Phone, fax, stationery and other office costs, it advises that the non-allowable expense would be "Non-business or private use proportion of expenses. (Ignore private use of phone and broadband service if this is insignificant.)"

If you use the phone mainly for business then the above applies and you would claim the full amount as an expense.

This information can be found here:

https://www.gov.uk/government/publications/how-to-calculate-your-taxable-profits-hs222-self-assessment-helpsheet
Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Capital allowance or not » Go to message
Hi,

This would depend on whether you bought the handset outright and paid the full amount up front OR whether you have purchased the phone as part of a contract that you will be paying monthly.

If you paid the amount up front, this can be treated as a Capital Allowance under 'item of plant'. More information can be found on help sheet 252, found here:

https://www.gov.uk/government/publications/capital-allowances-and-balancing-charges-hs252-self-assessment-helpsheet

If it is the latter, you would claim the appropriate apportionment of the contract (100% if used wholly and exclusively for the purpose of your business) under normal business expenses. More information can be found on the following page and help sheet (222):

https://www.gov.uk/expenses-if-youre-self-employed/office-property

https://www.gov.uk/government/publications/how-to-calculate-your-taxable-profits-hs222-self-assessment-helpsheet
Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Income tax » Go to message
Hi,

After entering your turnover and expenses into your self-assessment, it will calculate your taxable income.

In your example the £7,000 would be taxable, depending on your circumstances and whether you have other sources of income, this may be covered by your Personal Allowance.

Useful links:

https://www.gov.uk/self-assessment-ready-reckoner

https://www.gov.uk/income-tax-rates


Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Subsistence for the self employed » Go to message
Hi,

You are able to claim allowable business expenses for the items you have described. These may be covered under: train, bus, air and taxi fares; fuel and parking; or hotel rooms and meals on overnight business trips.

As long as all items claimed are wholly and exclusively for the purpose of your business.

A full list can be found here:

https://www.gov.uk/expenses-if-youre-self-employed/travel
Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Trading allowance » Go to message
Hi,

You would have to decide which is more beneficial to you by either calculating your taxable profits under the current rules, deducting expenses from your gross trading receipts and income, or using the new allowance of up to £1,000 to be set against your gross trading receipts and income without claiming expenses.

More information on the allowance can be found here:

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

Some scenarios that may help:

1) If your Trade or Property Income is £1000 or less.

You will not need to declare any trading income from self-employment and casual services, property income, or any of the expense associated with those receipts for the tax year in their Self-Assessment tax return. You would not meet the criteria for completing a Self-Assessment tax return if this was your only reason for completing a tax return, therefore, no election is necessary in these circumstances and you would automatically qualify for this relief and not have to pay tax.

2) If your Trade Income is £1000 or less.

You will still need to register for Self-Assessment if you: want to make a voluntary payment of Class 2 NIC for 2017/18; want to be eligible to claim Maternity Allowance for the self-employed; incur childcare costs and want to use this income to qualify for Tax Free Childcare; are a sub-contractor and want to claim for the tax deductions under Construction Industry Scheme (CIS). In these circumstances, you would need to complete the self-employment pages of the tax return and follow the instructions in the SA notes provided with the return.

3) If your Trade or Property Income is more than £1000.

You will need to declare and pay tax on your income if you have gross trading income from all sources of self-employment and casual services (other than employment) which totals more than £1000 and / or gross property income from all sources which totals more than £1000. You would complete a Self-Assessment tax return (unless your taxable profits from property or casual services are less than £2500 in which case you can declare and pay tax on this income via your PAYE tax code).

As mentioned, you can choose to either calculate your profits under the current rules, or you can elect to claim partial relief under trade and property income allowance. If you elect for partial relief you calculate your profits by deducting up to the £1000 allowance from your gross trading receipts and income from casual services and / or deducting up to the £1000 allowance from your property income. If you elect to calculate your profit using this method, you would be prevented from deducting any allowable expenses associated with the income the allowance is set against. If you deduct the trading allowance against the income of one of your self-employed trades, you will not be allowed to deduct any expenses from any of your self-employed trades.

Remember, it is very important to keep records if you are self-employed. For more information, see the following link:

https://www.gov.uk/self-employed-records
Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Car as an expense » Go to message
Hi,

So that we can give you relevant advice, could you provide some more information regarding your circumstances?

How have you claimed in the past or are claiming at the moment and how do you intend to claim going forward?

Thank you
Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Homeworker Expenses » Go to message
Hi,

These specific items would fall under those you can't claim for if you're self employed.

Please see the following link for more information:

https://www.gov.uk/expenses-if-youre-self-employed/marketing-entertainment-subscriptions
Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Apportioning use » Go to message
Hi,

You are correct in your understanding of claiming the expense at the end of the year.

For example, if it is £20 split 50/50 for the first six months of the tax year and then £40 split 50/50 for the second six months, your expense claim would be for: 6 x £10 and 6 x £20 = £180

More information on claiming expenses can be found here:

https://www.gov.uk/expenses-if-youre-self-employed
Starting up/ Business Expenses Q&A 19th April 11:00-15:00 » Paying Staff in cash » Go to message
Hi,

Even though you are a sole-trader, you are still required to register as an employer with HMRC in order to comply by the rules.

For more information, please see the following links:

https://www.gov.uk/employing-staff

https://www.gov.uk/register-employer

https://www.gov.uk/guidance/paying-employees-cash-in-hand-or-guaranteed-take-home-pay

Alternatively, please contact HMRC's Employer Helpline on 0300 200 3200 for further advice.

Self Assessment Q&A on 26th January » Can you switch claiming methods » Go to message
Hi,

You can find out if the simplified expense method (tax relief on 45p per mile for the first 10,000 miles and 25p for over and above 10,000 miles) would save your business money against your actual costs by using the tool found here: https://www.gov.uk/simplified-expenses-checker

The way to switch would just be how you record the expense in your tax return at the end of the financial year.

Thank you

Self Assessment Q&A on 26th January » Parental gift » Go to message
Hi,

The gift itself when you receive it is not taxable therefore you will not be required to include it on your tax return.

There are specific rules for your parents gifting you the money and Inheritance Tax. More information can be found here: https://www.gov.uk/inheritance-tax/gifts

If you or your parents would like to find out more, you can contact our Inheritance Tax help line on 0300 123 1072.

Thank you
Self Assessment 2018 » The tax calculation is higher than my profit » Go to message
Hi jhackett

I believe an answer for this was provided in another forum. Please let us know if you have any further questions.

Thank you
Self Assessment Q&A on 26th January » NIC Class 2 / 4 - separate payment due? » Go to message
Hi,

If you have completed your tax return online you will be able to view your tax calculation. This will include whether or not any class 2 or class 4 contributions were deducted. If they have been included then any refund calculated will reflect this. If they do not show on the tax calculation or you are unable to view the calculation, please get in touch with our Self Assessment department by web chat or phone and we will be able to check this for you. Contact details can be found here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/self-assessment

Thank you
Self Assessment Q&A on 26th January » First time doing a tax return » Go to message
Hi,

Any query about depreciation in value would be relevant to our Technical team and they would be able to discuss your own details. You can contact our Self Assessment department by web chat or phone and request to speak to a Technician about Capital Allowances. Contact details can be found here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/self-assessment

Thank you
Self Assessment Q&A on 26th January » Doing my tax return online » Go to message
Hi,

There could be one of a number of reasons why you are having issues. If you contact our Self Assessment helpline one of our advisers will be able to help you resolve this. Contact details can be found here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/self-assessment

Please have your personal details ready, as well as any online details you have created/received - user ID/Password/Activation code.

Thank you