Tax Returns

[Kate Allen]

Hi all

I will be submitting my first Tax Return this year and I was wondering what exactly I can claim against?

I am set up in my Box Room at home. It is still technically a bedroom as in it has a bed in it, a wardrobe and my nail desk in there.

My friend says I can put a percentage of my Utility bills in my Return, is this correct? as using Water, Gas and Electric in my treatments...

Also training for further courses, i.e Eyelashes, Eyebrows and Facials, but they will come into the next Tax year as not done those yet...

Does anyone have an expenses template I can download? or know where I can get one to make life easier?

Thank you!

 

[salonfrog]

Hi all

I will be submitting my first Tax Return this year and I was wondering what exactly I can claim against?

I am set up in my Box Room at home. It is still technically a bedroom as in it has a bed in it, a wardrobe and my nail desk in there.

My friend says I can put a percentage of my Utility bills in my Return, is this correct? as using Water, Gas and Electric in my treatments...

Also training for further courses, i.e Eyelashes, Eyebrows and Facials, but they will come into the next Tax year as not done those yet...

Does anyone have an expenses template I can download? or know where I can get one to make life easier?

Thank you!

Hi Kate

Yes, you can include a percentage of your bills.

Have a read through the link below. The general rule is that you can include any expense that is "wholly" and "exclusively" incurred in running your business.

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

 

[Kate Allen]

Hi Kate

Yes, you can include a percentage of your bills.

Have a read through the link below. The general rule is that you can include any expense that is "wholly" and "exclusively" incurred in running your business.

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

Thank you,

I will have a look when I get home, so I can start to work things out, then my friend can submit it online for me.

I work Full Time in my Day job, so already paying Tax and National Insurance in that Employment, so I shouldn't need to pay that much, hopefully I will get a nice refund as last year I am sure I spent out more money than what I made as I was starting up..... Lets hope so anyway!!!!!

 

[EllenHyuga]

I believe you pay tax on everything you earn from being self employed, as you are already over the tax allowance x

 

[BannerPenguin]

I believe you pay tax on everything you earn from being self employed, as you are already over the tax allowance x

Correct. I think you pay 20% tax on a second income.

 

[salonfrog]

Thank you,

I will have a look when I get home, so I can start to work things out, then my friend can submit it online for me.

I work Full Time in my Day job, so already paying Tax and National Insurance in that Employment, so I shouldn't need to pay that much, hopefully I will get a nice refund as last year I am sure I spent out more money than what I made as I was starting up..... Lets hope so anyway!!!!!

It will all depend.

You'll pay income tax on your total income (this being employed income plus self employed profit, less your personal income tax allowance for the year).

You'll be paying class 1 NIC on your employed income already but as a self employed trader, you'll be due to pay Class 2 NIC and class 4 NIC (depending on the level of your self employed profit).

There is however a cap on the amount of NIC you'll need to pay.

If like you say you made a loss in year one, you probably won't be liable to tax and you can carry those losses forward.

 

[Josie34]

Do you regularly work from home? If you have set aside a room in your house as a home office, you could be hit with a huge tax bill when you sell your property.

Many of Britain’s 5 million self-employed and freelance workers spend at least some of their time working from home. This brings with it some cost savings, because aside from low overheads, workers can also claim back some of the cost of running their home.

George Bull, of accountancy firm RSM, said provided that part of your home is used “wholly and exclusively” for business purposes during specific periods, certain expenses relating to your home office can be treated as a tax deduction.

“Expenses such as light and heat, plus telephone and internet costs, can be claimed based on the size of the office space used,” Mr Bull said.

“If you want to avoid any challenges from HMRC, or don’t wish to spend your time calculating the necessary apportionments, individuals can claim a flat rate of £4 per week instead.”

But there’s a catch – and it could cost you dearly.

If you designate a room in your home purely as office space, with no personal uses, a portion of your home could become liable for capital gains tax (CGT) when it is sold.

This overrides the Private Residence Relief, which makes your main home completely exempt from CGT.

“Be sure to designate your office a dual purpose office, for private and business use, to avoid this trap,” Mr Bull said.

In practice, this means having a bed or exercise machine in the room for example. If the room is small, you could also use it as a family study.

 

[Kate Allen]

Do you regularly work from home? If you have set aside a room in your house as a home office, you could be hit with a huge tax bill when you sell your property.

Many of Britain’s 5 million self-employed and freelance workers spend at least some of their time working from home. This brings with it some cost savings, because aside from low overheads, workers can also claim back some of the cost of running their home.

George Bull, of accountancy firm RSM, said provided that part of your home is used “wholly and exclusively” for business purposes during specific periods, certain expenses relating to your home office can be treated as a tax deduction.

“Expenses such as light and heat, plus telephone and internet costs, can be claimed based on the size of the office space used,” Mr Bull said.

“If you want to avoid any challenges from HMRC, or don’t wish to spend your time calculating the necessary apportionments, individuals can claim a flat rate of £4 per week instead.”

But there’s a catch – and it could cost you dearly.

If you designate a room in your home purely as office space, with no personal uses, a portion of your home could become liable for capital gains tax (CGT) when it is sold.

This overrides the Private Residence Relief, which makes your main home completely exempt from CGT.

“Be sure to designate your office a dual purpose office, for private and business use, to avoid this trap,” Mr Bull said.

In practice, this means having a bed or exercise machine in the room for example. If the room is small, you could also use it as a family study.

No, It's a spare Bedroom.. Nothing fancy, just a box room with a bed a wardrobe and a nail table.

I will however be migrating to the other spare room as I have too many products to store now and need more room around my couch as I am adding more treatments the next coming months, ie Facials, Lash lifts, HD Brows and Hopi Ear candling...

Can we put Training on the list of expenditures?

As Efile course is going to be a small fortune, Lash lift also a small fortune.. and my bettings are the waxing and other treatments will also be a small fortune!!!

 

[Unevenlemming]

I'm booked on doing these with HMRC if its any help

https://www.gov.uk/government/news/webinars-emails-and-videos-if-youre-self-employed

 

[salonfrog]

No, It's a spare Bedroom.. Nothing fancy, just a box room with a bed a wardrobe and a nail table.

I will however be migrating to the other spare room as I have too many products to store now and need more room around my couch as I am adding more treatments the next coming months, ie Facials, Lash lifts, HD Brows and Hopi Ear candling...

Can we put Training on the list of expenditures?

As Efile course is going to be a small fortune, Lash lift also a small fortune.. and my bettings are the waxing and other treatments will also be a small fortune!!!

If the training is only being taken to run your business, then yes.