Mobile Services - Charge for petrol or not?

[lores]

You can't claim it back, it's a tax deductable expense. This means you do not have to pay any further tax on your cost of mileage. Keep a log of your trips and the miles covered and put these on your self assessment. Some geeks have suggested claiming 45 pence per mile to also include the cost of wear and tear on your vehicle xx
hth

 

[LMA]

You can't claim it back, it's a tax deductable expense. This means you do not have to pay any further tax on your cost of mileage. Keep a log of your trips and the miles covered and put these on your self assessment. Some geeks have suggested claiming 45 pence per mile to also include the cost of wear and tear on your vehicle xx
hth

Right, so no expenses can be claimed you just keep a record.. But why would you be taxed on the cost of miles you cover anyway? That doesn't make sense... Why would you pay petrol to see a client and then get taxed on it? Am I being stupid here? I just don't understand any of it.

 

[Cholo]

Basically your profits are your income less expenses, and you only get taxed on your profits, so the higher your expenses, the lower your tax bill.

As a small business owner one of the most common expenses is your car, simply add up the miles you use for business, the cost of running the car, any payments you have made buying the car, insurance and compare it to the personal miles drove to come up with a business use percentage.

For example, if the total cost of running your car was £10,000 a year and 50% of the use of the car was for business, you could claim £5,000 as an expense. Now there are rules for leasing, buying, depreciating assets and different rules for vans but it’s probably best to discuss with an accountant

Paying expenses is simple, just make the expense, keep the receipt and at the end of the year, add them all up put this amount on your tax return. If you turned-over £50,000 and incurred expenses of £20,000 you will be taxed on £30,000 less any personal allowances.

As a small business owner anything you buy for your business is considered an allowable expense. This includes things like:

Cost of goods bought for resale (stock)
Cost of equipment you need buy
Advertising
Delivery charges
Heating and lighting in your business premises
Rent of your business premises
Postage
Stationery
Relevant books and magazines
Bank charges
Telephone use
Travel
Bank charges on business accounts


Also, its all here-

http://www.hmrc.gov.uk/incometax/relief-self-emp.htm

Get yourself on a free HMRC course or webinar. They're the experts- who better to learn from?!

 

[LMA]

That makes sense!
Thanks Cholo!

Are costs of beauty courses/training an allowable expense?
And do the HMRC need copies of receipts etc? That would be a bit faffy...

 

[Cholo]

You don't need to submit your receipts to HMRC but you do need to keep hold of them as you would need to provide them if you were subject to checks / investigation.

Training is an allowable business expense but only for CPD courses, not courses that allow you to start trading.

Hope this helps!

 

[Cholo]

This is the link for training with HMRC-

http://www.hmrc.gov.uk/startingup/help-support.htm

 

[LMA]

You don't need to submit your receipts to HMRC but you do need to keep hold of them as you would need to provide them if you were subject to checks / investigation.

Training is an allowable business expense but only for CPD courses, not courses that allow you to start trading.

Hope this helps!

Ahh okay. So do they do random checks on people?
And by that do you mean any course that carries CPD points? Or do they have to be ones you've done after you've already started trading?
Sorry for the millions of questions I just can never seem to find what I'm looking for on the HMRC site :/

 

[Cholo]

Yes, you could be subject to a check at any point.
HMRC guidance on keeping records is here-

http://www.hmrc.gov.uk/record-keeping/

This is the info you need on training-

http://www.hmrc.gov.uk/manuals/bimmanual/bim42526.htm

 

[LMA]

Yes, you could be subject to a check at any point.
HMRC guidance on keeping records is here-

HM Revenue & Customs: Keeping records

This is the info you need on training-

Specific deductions: administration: own training courses

Thank You!

 

[airendaie]

I decided that my working area is 20miles radius from my house, sounds a lot but I"m in a very rural area! I calculated how much this would cost me in petrol and incorporated this into my prices. If I had an enquiry out-with my area e.g. a wedding, I would charge extra but I would specify this when the client asked for an appointment. I do not mention anything about petrol charge on my site etc, only that I cover x, y and z areas.

Re mileage allowance, I use the flat rate method. You keep track of all your mileage over the year. When you come to do your self-assessment you can deduct 45p x your mileage from your taxable income. This just means that you have a smaller income to pay tax on, not that you are taxed on your mileage The flat rate is to cover your petrol, maintenance, insurance etc.

The other system explained by Cholo I would not attempt without an accountant! It can be advantageous if you buy a new car I believe or in certain circumstances. As mentioned, the HMRC website is a really great place to start!

Good luck x