Allowable Expenses - Self Assessment

[GazNicki]

Hi

I usually pay an accountant to submit the Self Assessments for our business, but would like to understand more about how this system works and ultimately submit them myself.

Could someone please guide me with Allowable Expenses?

I plan to use Simplified Allowances for things like Home Working, etc. My reading has the allowances as follows:

Home Working - Based on the number of hours worked at home on the business calculated each month to be around 108 hours. This is an allowance of £26 per month.

Office Costs - I have read there is an allowance of around £4 per week for office costs which is reasonable (rather than calculating floor space and usages). This equates to £208 per year or £17.33 a month.

Mileage - Calculated mileage at around 210 miles per month. At the 45p per mile (up to 10k miles) allowance, this is £94.50 per month.

When it comes to the mileage - can someone clarify if this is something I can claim?

The vehicle used is a car. It was purchased second hand last year at a cost of £8995. The car is almost exclusively used for business (getting to and from the place of work, collecting stock, etc.). The cost of the car (monthly finance payments, fuel and maintenance costs) go through the business books. The cost of the insurance premiums and the annual tax do not.

Based on this, is it reasonable to claim the mileage - or should the mileage be ignored as the car is funded through the business?

Also, should the monthly finance cost be attributed to "Car, Van & Travel Expenses" or "Interest & Finance Charges" when completing the Self Assessment?

 

[paulears]

The word that worries many is "almost", because HMRC often use the term "exclusively". Your accountant will have a professional opinion on this, and you might not. Imagine being interviewed and using the term and calling many years of claims to be reconsidered as wrong. even van ownership, which is fully justified as expenses of the business can be wreck if you use it for private use, even to a small degree. The fact you don't claim for the tax and insurance (as in business use) also might make them think hard about the legitimacy. If you've been happy and successful with how your expenses are claimed, talk to your accountant. To be frank - my accountant removes some of my expenses and adds others I discounted. His understanding of reasonable is probably better than mine.

 

[STDFR33]

You can claim 45/25ppm or actual costs, not both.

If you drive to a single place of work, that mileage is not allowable.

When you using the actual cost method, you should make an adjustment for any private use which would include travelling to a single place of work.

 

[GazNicki]

You can claim 45/25ppm or actual costs, not both.

If you drive to a single place of work, that mileage is not allowable.

When you using the actual cost method, you should make an adjustment for any private use which would include travelling to a single place of work.

Thanks, this makes sense.

Would the same be applicable to the Office Costs and Home Working?

From what I have read, you can claim both - but looking at it from the outside, aren't they both one and the same?

 

[Newchodge]

Have you thought about looking at what was in the previous self assessments, to see if you can work out what has been claimed, compared with the figures in the books?

 

[GazNicki]

Have you thought about looking at what was in the previous self assessments, to see if you can work out what has been claimed, compared with the figures in the books?

I attempted this. We recieved an overview each year of the submission, but only have the first year available. The second year (the most recent) is not here - it looks like we submitted the original without getting a copy.

Since the accounts have been submitted by an accountant, the actual submission is not available online.

I have carried on, and my cash based excel spreadsheet seems to be quite accurate. I've cross referenced categories from the HMRC Self Assessment into the spreadsheet and will look to improve the layout to make generating the submission much simpler.

 

[MyAccountantOnline]

Have a read here

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

 

[GazNicki]

Thanks.

I think I need to review my accounting spreadsheet for the next lot of accounts to make it more streamlined.

 

[MyAccountantOnline]

Thanks.

I think I need to review my accounting spreadsheet for the next lot of accounts to make it more streamlined.

Spreadsheets aren't really ideal for keeping accounting records - have a look at VT cashbook it's free and uses the same headings as a tax return

 

[GazNicki]

Thanks, I will have a look at that.