Confusion about tax deduction [Archive]

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manny2003

9th June 2008, 20:15

Hi all,:)

I am new to this. I have set myself up as a self-employed therapist and I am getting confused about the expenses i can deduct from the income. I have looked at the HMRC website and I am still not sure. Can i deduct the money i spent on oils, couch and towels and what about training costs like course fees and books which I have inccurred before setting up the business:|
How would I record the start-up costs and can I off set some of the expenses I have made before I registered myself self employed but was purchased for the business in advance?:|And how long far back can i do it?

I have spoken to business link and they said i can off set all of these but reading on the HMRC website I am not so sure now.
How would you record electricity, gas and phone bill, motoring costs if it is only used on a part-time basis? :|
My earnings will be very low and I want to make sure that I do not pay tax on the things that I do not need to pay on.

Advise will be very welcome.

Kind regards
Manny

elainec100@cheapaccounting

9th June 2008, 20:22

Any costs which are wholly, exclusively and necessarily for the business are allowable like oils, couch etc.

For use of home as office - see the sticky on sole trader v limited for a good link.

jholden

9th June 2008, 20:24

Try this thread:

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=69363

Jason

CassioAcc

9th June 2008, 20:40

If your earnings are under £4,825 you can apply for a Class 2 exemption. It won't save a lot but evey little helps !!!

Search on HMRC for CF10 form.

Anna Chandley

9th June 2008, 23:39

The training costs, course fees and books, incurred prior to setting up the business cannot be deducted as an expense for tax purposes. The revenue considers these to be costs of putting yourself in a position to trade and not trading costs.

Essentially costs incurred in learning a new skill are not tax deductable. If you were required to attend annual refresher courses after you started to trade these would be deductible for tax.

I am assuming that you are not operating via a limited company where the rules are slightly different.

manny2003

11th June 2008, 19:00

uksel

15th June 2008, 21:13

I am assuming that you are not operating via a limited company where the rules are slightly different.

sorry to burst in on the thread, but how would this change things because she is working for a limited company?

Anna Chandley

16th June 2008, 00:12

sorry to burst in on the thread, but how would this change things because she is working for a limited company?

The cost of training employees is an allowable corporation tax deduction for a company.

koicarpentry

16th June 2008, 19:04

Is training the only employee/director allowable. e.g. Me doing my NVQ Level 3 in Carpentry

taxattack

17th June 2008, 09:09

Thank you all for your valid replys. I am a lot clearer now and it is nice to know that I can always ask on this forum about taxes.

I have applied for the exemption of the class 2 contribuitions at the same time as I have registered myself as self-employed.

Thank's again for the infos.

Manny

Just checking that you realise that not paying class 2 may limit your entitlement to state benefits and pension.

For NI faqs, see www.hmrc.gov.uk/faq/nicqse.htm (http://www.hmrc.gov.uk/faq/nicqse.htm)

Chris

Jenni384

17th June 2008, 09:44

Just checking that you realise that not paying class 2 may limit your entitlement to state benefits and pension.

Playing Devil's Advocate for the moment, depending on your age, some people wonder whether it's even worth it - who knows what state pensions are going to be like in 30-40 years time? :|

That said, £2.30 a week is a small price to pay 'just in case.' ;)