Self employed gardener

[Brasstrumpet]

I’m a self employed gardener. I do my own tax return, I keep it simple so I don’t claim for fuel etc. is this ok to do?
I dont have many expenses but have recently bought a new strimmed and hedge cutter. Can I just put this through as a business expense on my next tax return. The total amount is around £150.

My record keeping is producing an invoice for every job I do. Whether the customer has one or not, I still make one and file it away. All money gets put into my bank account (separate from my personal account) and every week I transfer money into my personal account to live off. If I have cash jobs, I go to the bank once it has built up and deposit it into my work account. The receipt then gets put into my file of invoice’s showing which invoices the cash corresponds with.

does this seem an ok way of doing things?
many thanks,

 

[MikeJ]

Sounds like you're way too organised. You should be tracking the mileage you're doing, as that's tax deductible. Are you keeping money in the business account for tax? If so, how much.

Seriously worth looking at an accountant, it'll probably save you money overall.

 

[MBE2017]

The simplest way to explain what you can claim, is as long as the item is for sole use in your business, you can claim for it, as in your trimmer. Where you might use say your own car in the business, but also for personal use, you might be able to claim for part of the costs.

You can claim fuel, or more easily a flat mileage rate. Personally I would recommend finding a local accountant by reputation, who can explain what you can do more clearly, and his fees can be offset as well.

 

[numbersrule]

Hi Brasstrumpet
It sounds like you could claim for things like vehicle mileage that you are not currently claiming for and definitely the strimmer as per other posts. The effect of not claiming expenses is, as you are no doubt aware, that you are probably paying more tax than you need to ( but if this is your first year then there is still time do something about it ).
Making a claim for an expense is a simple process and as you sound very organised I am sure you would find it no bother at all.
For example, in terms of running costs for your vehicle, you could keep a record of the vehicle mileage when on jobs and claim an expense of 45p per mile for the first 10,000 miles.
This is better than simply claiming 'fuel' because the 45p is intended to allow for other running costs as well as fuel.
In terms of the £150 claim for your strimmer you would only need to record and claim for 333 miles and that would generate another £150 in expenses. So if you think the strimmer is worth claiming do you not think the mileage is worth claiming?
Estimate how many job miles you might do in a year and do the sums!

 

[Daybooks]

You should be registered as self employed and would probably benefit from reading the following articles which answer your questions and much more:

https://www.gov.uk/self-employed-records

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

 

[WaveJumper]

In short go see an accountant your going to find out your missing out on a lot, getting yourself set up correctly now could be the difference between success and failure plus of course give you peace of mind.

 

[DontAsk]

Are you keeping money in the business account for tax?

For a sole trader it's the individual who is liable for tax, not the the business.

Far better to put money aside it in a personal savings account. You can easily get 4%+ instant access these days, even more in a notice account. You can easily arrange to give notice, say, 90 days before the tax payment is due.

 

[Daybooks]

For a sole trader it's the individual who is liable for tax, not the the business.

Far better to put money aside it in a personal savings account. You can easily get 4%+ instant access these days, even more in a notice account. You can easily arrange to give notice, say, 90 days before the tax payment is due.

Are you regulated to give investment advice? ?

 

[MyAccountantOnline]

I’m a self employed gardener. I do my own tax return, I keep it simple so I don’t claim for fuel etc. is this ok to do?
...

If you are paying tax by not claiming all allowable expenses you are paying unnecessary and avoidable tax and possibly NIC.

You can do that if you wish.

You may find paying an accountant would save you tax and NIC.

 

[DontAsk]

Are you regulated to give investment advice? ?

I was merely stating facts, not giving advice

 

[Brasstrumpet]

For a sole trader it's the individual who is liable for tax, not the the business.

Far better to put money aside it in a personal savings account. You can easily get 4%+ instant access these days, even more in a notice account. You can easily arrange to give notice, say, 90 days before the tax payment is due.

Yes I have an isa which I put the rest of my monthly earnings into after I have transferred what I need every month to my personal account for bills etc.
i always make sure I have some kept a side for a rainy day and the tax bill at the end of the year.
I produce paper invoices for every job I do, even if customer doesn’t want an invoice I still make one and file it for the tax year. Cash gets collected and deposited into the bank when I get chance to go to the bank. Then the deposit receipt gets filed with the invoices. Then when I do my tax return every thing is totalled up for my total earnings for that tax year.

 

[neilsolaris]

Technically, I would have thought that your strimmer and hedge trimmer are capital assets, which are eligible for capital allowances. With the annual investment allowance, you'll be able to save the same amount of tax as if it's an expense.

 

[eteb3]

your strimmer and hedge trimmer are capital assets, which are eligible for capital allowances

Only if not using cash basis, is my understanding.

(I’m guessing as small sole trader Brasstrumpet is not using traditional accounts)

Can anyone confirm? It’s allowable, but not as capital, so can’t be depreciated?

 

[DWS]

Only if not using cash basis, is my understanding.

(I’m guessing as small sole trader Brasstrumpet is not using traditional accounts)

Can anyone confirm? It’s allowable, but not as capital, so can’t be depreciated?

If using the cash basis you are correct that you can not claim Capital Allowances.
Even if using accrual accounting these items can be picked up quite cheap these days so I would probably still advise to expense the items rather then claiming AIA.

 

[eteb3]

does this seem an ok way of doing things?

Definitely. I've run a small business in a similar way and had no issues at all.

All those advising an accountant have good points to make. I know some brilliant accountants, but I find it a bit annoying that the profession seems reluctant to be paid by the hour for advice, rather than have me turn my spreadsheets over to them for them to twiddle with. Or worse, they want you to subscribe to fancy software that makes the twiddling easier. I can do the grunt-work, I just want their knowledge and expertise.

If you get on HMRC's mailing list, they regularly do webinars on what expenses you can claim and how to do that.