In order for your accountant/book keeper to be able to do the best possible job for you it’s important to make sure you have all your sales records in order, plus a record of receipts. If you don’t you could end up paying more tax than you need to!
There are allowances/expenses that are available to put against your income that only an accountant will know about, so don’t try to work this out on your own or you could find yourself in trouble!!
If you are freelance/self employed, broadly speaking you can deduct from your turnover all the costs you incur for the sole purpose of earning business profits (to quote HMRC.) The full checklist is here on the HMRC website.
- Gas, electricity, water, council tax. If you work from home then you can claim a proportion of your household bills against your tax. If your office accounts for say 20% of your household space then you can claim that percentage against tax.
- Mortgage. The interest portion of your mortgage repayments can also be claimed, again on a pro-rata basis.
- Broadband/phone. You can claim against your business calls and a proportion of the line rental and broadband connection.
- Computers. If your computer is only used for your business, then you can offset the whole cost.
- £104 no quibble deduction. If you use your home even in a minimal way to conduct business, such as paperwork, HMRC will accept a £2 per week office deduction.
- Clothing. You can’t claim unless you need specialist items that are entirely used for work. For example if you are a plumber you might need specialist trousers, with padded kneecaps etc. Or if you do heavy-duty work you may require steel toe capped boots or a self-employed dentist might require surgical clothing. You get the picture.
- Entertaining. Sadly, taking clients out to lunch is a ‘non allowable expense’, even if you do spend the whole time talking about work!
At Hazeldene Accounting Services based in North Tyneside, we offer a free consultation for all new customers. It is very important to have your tax returns completed and submitted on time to avoid HMRC penalties.
To get in touch with us to arrange a free consultation call Richard on 07970 298253 or click here and we will get back to you asap.