Think back to January 2019 – were you rushing around and panicing because you hadn’t filed your Self Assessment form? Here, at Caroline Streatfield Bookkeeping, we are giving you a bit more time. The tax return deadline for filing your online Self Assessment for the tax year ending April 2019 is midnight on 31st January 2020 and your bill has to be paid by then as well. Unfortunately, if you wanted to file a paper return, you’ve missed the deadline of 31st October 2019.
What Are Allowable Expenses?
In the latest blog from Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex, we are able to help you file online and we’re also going to try and explain your general allowable expenses. Some people think that everything you spend is an allowable expense, but it doesn’t quite work like that, although knowing what is allowable is extremely important, as deducting this from your business income will determine how much profit you have made from your business. It’s quite expected that your business will have various running costs but of course allowable expenses do not include monies you take from your business to buy personal items.
What HMRC Says
We’ve gone straight to the HMRC website for the following:
- The expense must have been for the sole purpose of earning business profits called the ‘wholly and exclusively rule’.
- Some items bought for your business might also be used for private reasons and here you can only claim the business part of the costs.
Items Used For Business And Privately
In a nutshell, there are 3 items that immediately spring to mind, your mobile phone, your home and your mode of transport. You will have to find a reasonable method of calculating how much of the costs are incurred by your business and by you personally. Other costs which you can claim as allowable expenses are office stationery, which will include postage, printing, ink cartridges, computer software etc. You might also have clothing expenses such as uniforms, staff costs, advertising and marketing fees such as website costs and training courses.
Phones
With reference to your phone, it’s going to quite simple to work out if you have a monthly contract and itemised bill, but if you are on “Pay as you Go”, you will have to make a fair assessment.
Your Home As An Allowable Expense
This will come into play if you have a room which is set aside for business use and here you will be able to claim a proportion of household costs including heating, lighting, insurance, rent or mortgage interest. There are also other considerations including the number of rooms excluding halls, toilets and bathrooms and how many days of the week and hours per day you spend in the dedicated business room.
Vehicle And Travel Expenses
This is a broad field and in relation to your vehicle will include insurance, repairs, servicing, fuel, parking charges, licence fees and breakdown cover. Travel incorporates train, bus, air and taxi fares, hotel rooms and meals on stays while you are away. It’s worth noting that allowable business expenses do not include travel between home and work and any vehicle fines you may incur.
What To Do Next
If you are struggling with filing your online assessment form, Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex offers a Self Assessment tax service. Call us on 07982 682746 or email info@bookkeepereastbourne.co.uk to find out how we can help you. We will visit your home or workplace within East Sussex and can also work remotely to cover other locations, which are further afield.
Next time, we’ll be talking about capital allowances, so be sure to stay tuned to our blog.