[barryargent]

oh and what a mindfield this is.....
well ive had a relative helping me out with this,and has been doing her books for 25yrs.However some things have come to light and im so confused,i really am unsure whether its being done right,and as ive read from loads of other ppl commenting on tax returns,the blame will fall on me if i dont check this out.
This yr i got a loan approx £6500 - do i include this on top of my income???
And with this,i bought brand new equipment approx £4000 and a van almost £2000.The loan we borrowed has been spent completely on this stuff,my question is can i put thru 100% van and equipment.My concern is if i dont,my income looks a lot bigger than it is because of the loan.
I normally do my own accounts,apart from the 1st yr which i had an accountant and a bad experience.This yr due to the loan and large amount of equipment im now baffled.
Also i dont have a room allocated for business use,i do my accounts in my kitchen,and the laptop i bought for business use is in the front room - dont have a spare room to use for business.So what proportion of rent / water /electric / gas (if any) can i put thru,and what expenses without receipts can i add - i read i can put allowances thru like £200 laundry (and dont need a receipt for this).Thanks guys.

[dianegreenwood]

Hi Barry

The loan of £6,500 goes to the Balance Sheet and is not part of your Sales Turnover for the year on the Profit and Loss Account.  You can claim only the interest payments on the loan as an expense on the P & L. 

You can claim Capital Allowances on the equipment and van.  In the first year you can claim 50% of the cost of buying the van, can't tell you how much you can claim on the other equipment without a breakdown of what it is.  You can claim 100% of the cost of the laptop in Capital Allowances and all other computer equipment.

Business use of home premises is a bit of a minefield and my advice, when you don't have a specific area of the house as an office, would generally be to not put anything through for gas/elec/water/rent, etc unless its going to make a big enough difference to your tax bill to justify the risk of an investigation by the revenue.  If you have a dedicated office then you calculate by the sq ft of the house used up by the office as a % of the household bills.

For laundry, I keep a record of every wash (for the business) I do (just a tally sheet in the utility room) and then calculate the actual cost based on kw/hours.  That way HMRC can't query it because there is an accurate means of measuring business use of the machine.  I do the same for hours of tumble drying time.

Bearing in mind the above is bound to lead to another 5 questions, perhaps you should dip your toe back into the accountant pool?  They could actually save you money in the long term if you get the right one, especially if you are unsure of the difference between capital expenditure and expenses.

Hope that helps.

Kind Regards

Diane

www.freshlymaid.co.uk

[barryargent]

thanks so much diane.This info was real helpful.
Well i know this says barry,but its actually his partner emma.Im pregnant and highly emotional at the mo,and this being the 1st time ive offered to do this for partner,his relative usually does it,i think i went overboard and paniced.I was up til stupid oclock last night,couldnt sleep,dreamt of figures when i did.And then a fresh start on it this morn,proved much more beneficial than the last 2 days.Ive just read the short tax return form (each question) and the notes over and over.And eventully it clicked.When i was confident i had an idea,i rang inland revenue and they were great and asked all the q's i did on here and got answers.I dont have to put the loan thru at all apparently,and only the interest is allowed to be paid by the business,50% on both equipment and van for capital allowances,which i have worked out now,after they explained that capital is assets.
And they went thru what i could put thru,what was reasonable,for laundry,and expenses on house.Said a max of £3 a wk for bills,but less if i wanted,and £100-£200 was reasonable for laundry.They said the taxman wouldnt be annoyed as long as the amounts like this are reasonable.So thats that sorted for another year.Ive made very detailed notes about how i worked it out,cos sometimes pregnancy brain makes u forget all sorts of things.Thank god for the inland revenue,i know they can rinse u dry but on this occasion they really have helped me!!thanks for ur advice, emma

[dianegreenwood]

Hi Emma

Glad you got it sorted!  I agree with you, the Revenue are usually very helpful if you ask for their advice before doing something.

Kind Regards

Diane

www.freshlymaid.co.uk

[Moderator David@stives]

I would also say get an accountant , they dont cost much and can save you more than they charge.

For instance my accountant told me from this April you can now claim back 100% tax relief an capital items under £50'000 in the first year of purchase.

[Moderator David@stives]

Oh p.s good luck with the babby