Slight confusion on what I am able to claim back

[Validis]

Hey guys. Just a quick question here. I have only been self employed since April. I am registered as a Sole Trader under the CIS Scheme. I keep hearing on the radio about how we must now do our self assessments. So I registered for self assessment and was waiting for an activation code through the post.

However, I have been told conflicting things about what I am able to claim back. I have all my receipts for work clothing, equipment, tools, travelcards, etc. But I have been told that I wont be able to claim any of that back because I am not VAT registered. Other people have told me that I am able to claim back on those things, aswell as other things like a small percentage of energy bills, telephone bills for business use etc.

I have also been told that doing my Self Assessment is just to work out how much tax I have underpaid or overpaid, and that has nothing to do with being able to claim back things.

So I am wondering if I should get myself an accountant or not. (If I am not able to claim back anything, then it wouldn't be worthwhile to get an accountant), Or whether I should go ahead an do my self assessment online.

 

[danzor]

For my first year or two of being self-employed I had an accountant. I do it myself now as its pretty easy.

You claim anything that is an expense, tools, clothes, travel receipts, fuel receipts, insurances, college courses, van etc... Just keep all receipts

 

[Validis]

Even if I am not VAT registered? How would I claim these back? Can I do it online?

 

[Caerdydd]

Providing they are 100% business expenses you just claim the full amount of the receipt back (including the vat) even if you are non vat registered.

If you were vat registered then say you buy a drill @ £100 inc vat, you would claim the £80 against your company as the cost, and the £20 back from the vat man.

The advantage of being vat registered is that you can claim the vat back on items, but on the other hand you then have to charge your customers the vat. No problems if your working for businesses, but Mrs Jones won't be happy paying 20% more than employing A N Other spark who's not charging the vat.

 

[Validis]

Thanks Caerdydd. Another quick question. I know it may sound a bit amateur, but who is the 'company' in my sense? I am currently Self employed, and go through an agency to work for the Electrical Company I'm with. Is it the electrical company that are the 'company', or the agency? And Where do I claim these back?

 

[danzor]

The 'company' is you, that's if your doing your own assessment. If you have your gateway key etc for the HMRC website you can log on and go through to your accounts, and click on the 'self assessment' area. There are area's to enter all your details, you can call HMRC for help or search google

 

[mogga]

GET an accountant I had one do my CIS books for the 6 months she mentioned things that I haddent even thought about An Accountand will cost you but its claimable and will be well worth it in the long run
KEEP receipts preferably in month polly pockets or similar
keep vouchers,payslips in same Make accountants job easier MOT,TAX,Fuel servicing of vehicle Broadband dongle mobile phone ect ect ect they will advise n sort things out Mine was £250 n best £250 Iv ever spemt

 

[Deleted member 26818]

Validis.
What you have to do, when filling out the Self Assessment on line, is list your total income before tax.
List your total expenses.
Then list the amount of tax you have already paid.
You will also have to list stuff like intrest received on any savings, but this will be separate from your total income.
The Online program, will then deduct your expenses, work out how much Tax an Class 4 NICs you owe, then deduct Tax already paid, then if you have overpaid, will give you the option to donate the over payment to charity, or have it refunded to yourself.
It will then give you the option of a cheque or being paid straight into your bank account.
The expenses I claim for are:
Travel costs, if I use my car/motorbike, I claim a milage allowance, as this covers insurance, MOT, Tax, Maintenance an wear and tear.
Clothing, Safety boots, laundry, I claim £10.50 a week for laundry.
Mobile phone, including cases, chargers, docking stations etc.
Anything to do with my computer, printer, internet access, etc.
Postage and stationary, pens, pencils, file folders, etc.
Tools obviously, calibration and batteries.
Any registration fees, such as JIB/ECS, IET etc.
Course and exam fees, 2382, ECS, etc.
If, I work nights, or am away from home overnight, any food or drink costs, if necessary, I'll also claim for accommodation.

 

[Amp David]

As see it as we're electricians so do electrics and an accountant is an accountant and do accounts.

Leave all my stuff to the accountant. They do it right meaning I don't have to worry about anything other than electrics

 

[HandySparks]

Clothing, Safety boots, laundry, I claim £10.50 a week for laundry.

Hi Spin,
That's a good whack for laundry. I think I only claimed £0.50 or £1.00 per week on my last SA for laundry. Is this figure recommended anywhere or just what you thought reasonable?

 

[Amp David]

Depends if you're self employed or employed though.

 

[HandySparks]

Depends if you're self employed or employed though.

If that's for me, self-employed.

 

[Deleted member 26818]

Hi Spin,
That's a good whack for laundry. I think I only claimed £0.50 or £1.00 per week on my last SA for laundry. Is this figure recommended anywhere or just what you thought reasonable?

It's the actual cost of a service wash at my local Launderette.
When I was working at the O2, I was talking to another Agency chap who was being paid through an Umbrella company, they allowed £20 a week.

 

[GT1]

I think what the OP needs to be clear with is that what people are talking about when they talk about "claiming back"... is that you are claiming things back against your income tax on your earnings only..

So unless your earning enough... you wont be claiming back anything....!

So if youve spent £5000 on setting up the business, you may be able to claim some of that back, against the income tax on your earnings....
Remember, what your aiming to do is reduce your income tax liability.

Dont get confused with VAT liability. Thats a completely different kettle of fish and probably best ignored in the early years, unless your invoicing lots to commercial organisations and charging them VAT.

 

[Validis]

Thanks for all the advice guys. It's been invaluable knowledge for me! Turns out, after all, I don't even need to do a Self Assessment at the moment, since I have only been self-employed since April 2011. I wasn't aware that the Jan 31st deadline was for the Year 2010-2011! I take it that means I will be doing my self assessment in April then?

 

[Octopus]

Thanks for all the advice guys. It's been invaluable knowledge for me! Turns out, after all, I don't even need to do a Self Assessment at the moment, since I have only been self-employed since April 2011. I wasn't aware that the Jan 31st deadline was for the Year 2010-2011! I take it that means I will be doing my self assessment in April then?

Yes, the deadline coming up if for the tax year ending in 4th April 2011 (why can't they make it easier by simply using the 31st Mar.

I'd definitely recommend getting an accountant, locally if possible so they are part of your "network".

Remember - yes you'll have to pay them but on the day you're paying them, you can be out working.

 

[Andy 7671]

Umm...I trust you have your UTR number to open HMRC gateway.

If you use a payrollcompany..Sterling Gabem etc you can claim that as well.

If you are looking at getting a mortgage or loan in future get an accountant as they want certified accounts, otherwise its fairly easy,

 

[Deleted member 26818]

Umm...I trust you have your UTR number to open HMRC gateway.

If you use a payrollcompany..Sterling Gabem etc you can claim that as well.

If you are looking at getting a mortgage or loan in future get an accountant as they want certified accounts, otherwise its fairly easy,

You can't really claim for such fees, as they are levied before tax is deducted, and would not be considered as part of your income.

 

[Des 56]

Thanks for all the advice guys. It's been invaluable knowledge for me! Turns out, after all, I don't even need to do a Self Assessment at the moment, since I have only been self-employed since April 2011. I wasn't aware that the Jan 31st deadline was for the Year 2010-2011! I take it that means I will be doing my self assessment in April then?

I believe you have until October ish 2012 to do a paper return for the year April 2011 to April 2012
The January deadline is then 2013 for online assessments for 2011/2012

 

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