Expenses advice

[lee989]

Hi everyone.

Been doing a self assessment for years but never claimed for expenses, as I never had to buy anything specifically for business use and it's not been full time until recently. Also because i'm not an accountant, i'm never really sure whether what i'm doing is right, or if i'm keeping the correct paperwork, and it was just easier and less to worry about to ignore any potential gains from claiming expenses.

I need to do my self assessment for the 16/17 period, and I just want to see how much I could be saving by claiming for my expenses, especially since this is my first full year being only self employed and working 40+ hours weekly.

Just to note that I understand each case is unique in some way, and I should get an accountant and no replies to this constitute as legal or financial advice... But I also figure there's a huge amount of collective knowledge of this subject here and my accounts are relatively simple, so hopefully someone can provide some insight.

So, on to my questions...:

1. When calculating the number of rooms in my house, what classes as a room? One guide I read said kitchen, toilets, bathroom and hallway, another didn't mention kitchen or hallway? I have 2 toilets, 1 bathroom, 3 bedrooms (1 is the office), 2 living rooms and kitchen. Only bedrooms and living rooms in my list count, so thats 5 rooms?
   
   
2. My Kitchen and 1 of the living rooms are knocked into one open plan room. I personally think it's disingenuous to say it's 1 room, it covers more than half the downstairs of the house! But how do HMRC view open-plan rooms? Is a room defined by the walls, or by the functional use of the space?
   
   
3. Most of my bills are online. How should I be keeping records of such expenses? Should I look to download and print PDF copies of my bills?
   
   
4. In addition to Q3 above, can I instead keep a summarised list of such things as utility bills? So instead of downloading and printing the PDF's (that are up to 10 pages long due to all the crap in them), instead just enter the amounts and dates into a spreadsheet? Or do I have to supply the full copy of each bill if asked to do so (which this year would be nearly 50 pages!).
   
   
5. My "job" is also my hobby. So if I took a full time job tomorrow, i'd still keep my subscriptions to certain pieces of software (accounting software for example) and online publications that I currently could claim for. What would happen in the event my expenses were higher than my income? For example I may only do a few hours of maintenance work for old clients so I need to stay "self employed" to register that income, but if I only earn £300 from that, but have £500 expenses, I have a -£200 net income. Would it be advisable to just switch these subscriptions too myself personally and just deal with it?
   
   
6. Can I switch between simplified expenses and calculated expenses each year depending on which yields better results? Or do you have to stick with the same method each year for calculating "use of home" expenses?
   

Thank you in advance for any guidance on this.

 

[Scalloway]

3. Saving the pdfs on your PC is ok. Save another copy on a usb stick/dropbox etc as a backup

4. You are unlikely to have to provide HMRC with copies of your bills unless they decide to query your accounts.

5. If you carry on doing your self employed work when you go back to PAYE you can offset your loss against PAYE income.

6. As far as I am aware you can select whichever suits you, apart from motor expenses.

 

[DontAsk]

2. It's one room. Calling it a kitchen diner doesn't make it two rooms. Same if it were a lounge diner.

3. My accountant takes electronic copies of everything, whether sourced in that form or scanned from paper originals. No need to print anything. Makes end of year handover a doddle as everything goes on a USB stick. Also a good way to keep backups. Accountant advice is that these files are adequate for the 6 year retention and I can destroy the originals once accounts are final.