Sole-trader expenses claim confusion. Help!

[vikash23]

Hi,

I am a sole trader and working as a full time employee too.

I would like to know about claiming expenses.

below are the expenses claim I see from the UK gov website

1. "Office, property and equipment
   Car, van and travel expenses
   Clothing expenses
   Staff expenses
   Reselling goods
   Legal and financial costs
   Marketing, entertainment and subscriptions
   Training courses"
   

under this
"You may be able to claim a proportion of your costs for things like:

• heating
• electricity
• Council Tax
• mortgage interest or rent
• internet and telephone use"

So what percent of the council tax I can claim. I pay £2200/year for council tax. Can I claim complete £2200 or 20% of £2200?

Like wife for mortgage, mobile bill, internet, personal computer?

For my business i use around 50 to 60 usb drive / year. which will cost £180. courier cost will be £180. So total is £360. So can I claim £360 expense or 20% of £360?

Any help is appreciated

 

[DWS]

You can claim for expenses that you incur as part of running your business, if you work from home for your self employment then you can claim a percentage of the costs.

 

[WaveJumper]

If I was you I would sit down with an accountant in the new year and make sure you fully understand the ramifications of what you can and can’t claim for and the possible impact that this could have for example if you came to sell your house

Running a business from home

Running a business from home - insurance, business rates, expenses, tax allowances

www.gov.uk

in the meantime read up on the process ie you may end up with business rates being levied, issues in the future regarding capital gains. Before you go down the rabbit hole make sure your fully aware of all possible financial outcomes

 

[paulears]

I've been a sole trader working from home for a long time and for the last three years I have also had an office where I spend time. HMRC did an inspection once and one thing they queried were a number of expenses - and with my business they were quite odd sounding ones. At the time I was claiming 50% of my electricity costs, but only 33% of my gas. No water, and no proportion of the council tax, because that would entail changing the status of the home. The electricity was a quite high amount because at that time I had numerous items of electronic kit turned on for 24/7/365. My office acquisition meant that clearly the office utilities, including would ALL be claimed. I did not reduce the electricity percentage as that equipment is still there. My accountant suggested the percentage as reasonable, and HMRC did not query it due to the nature of my business. The rate relief on my office relies on me never having had business premises before and if I had my home council tax status changed I suspect I'd not have got the relief. Claiming 50% of my council tax would have been potentially tricky status wise?
I don't understand this bit

For my business i use around 50 to 60 usb drive / year. which will cost £180. courier cost will be £180. So total is £360. So can I claim £360 expense or 20% of £360?

if you are buying these USB drives and sell them then the cost of the item and the cost of postage is an expense of doing business. If you double the cost and sell them for £720, then you made £320, and will pay tax on this, but still have your personal allowance - but I guess your full time job eats that up - so your liability would just be the 360. However, whatever you decide to claim for the percentage of gas/electric reduces your profit, and you only pay tax on the amount you actually make from business. If you are a hobby business, then just declare the profit you made on your self-assessment and they'll work it out.

Just remember that in most cases, you need to be talking about things 100% for the business when you look at things like computers and equipment. Buying a special A3 printer when you have a normal A4 one in the house would probably be fine, as would buying two monitors, one for home one for business - but sharing can be very difficult for you to evidence if required. It must be reasonable. We have a car for our private use and a van for the business. That works very simply. Sharing the car would mean mileage and record keeping. Why not see if a local accountant will do you a free 30 minute chat - many do.

 

[Paul Kelly ICHYB]

If I was you I would sit down with an accountant

Best advice!

 

[14Steve14]

I seem to remember that when I spoke to an accountant about this when I started working from home, I was told that I could claim for the parts of the house that I used for the business. So if the house had 10 rooms and I only used one of them I could claim 1/10th of the utilities. If I used 2 rooms 1/5th. Whether that was a guide I have no idea but that's sort of how its calculated at HMRC where it explains about claiming these sort of expenses.

 

[Newchodge]

I seem to remember that when I spoke to an accountant about this when I started working from home, I was told that I could claim for the parts of the house that I used for the business. So if the house had 10 rooms and I only used one of them I could claim 1/10th of the utilities. If I used 2 rooms 1/5th. Whether that was a guide I have no idea but that's sort of how its calculated at HMRC where it explains about claiming these sort of expenses.

Assuming the use is exclusively for business? If I use the dining room table to enter my accounts on my laptop, once a week for 1 hour, in a house with 4 rooms. I cannot claim 25% of the utilities.

 

[MyAccountantOnline]

Hi,

I am a sole trader and working as a full time employee too.

....
"You may be able to claim a proportion of your costs for things like:

• heating
• electricity
• Council Tax
• mortgage interest or rent
• internet and telephone use"

So what percent of the council tax I can claim. I pay £2200/year for council tax. Can I claim complete £2200 or 20% of £2200?

...

How much time do you spend working at home and how much of your home do you use solely for business use?

If you are going to do your own accounts and tax returns you may find using Simplified expenses easier (although it may not give you the maximum tax savings) https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

 

[MyAccountantOnline]

Hi,

I am a sole trader and working as a full time employee too.

I would like to know about claiming expenses.

...

For my business i use around 50 to 60 usb drive / year. which will cost £180. courier cost will be £180. So total is £360. So can I claim £360 expense or 20% of £360?

Any help is appreciated

The cost is £360 thats the expense you've incurred.

As a sole trader you are taxed on your taxable profit which is your business income less your allowable business expenses which will include the £360 for USB drives.

 

[augustine.an]

Hello,
It’s my first time in this forum and just a newbie being a sole trader so if I have any unnecessary words or action, please let me know and I do apologize.

I just have a general question about being a sole trader.
I am just literally about to start with it, I haven’t contacted HMRC yet.
I haven’t done any transaction with customer yet, no income yet.
But I already opened my business bank account with my Trading name.
Do I need to contact HMRC now?
What are the things I need to do before starting working on something for a customer and earning my first pay as a sole trader?
I am not a permanent resident here but have a Biometric Residence Permit,
Holding a dependant visa.
Have my personal NI number .
Still currently employed as a full time employee in a company here in Havant.

Thank you very much in advance