Dead Simple expenses if you’re self-employed

Even with the best intentions, and using great time saving apps like Quickbooks or Xero, keeping all and every receipt for business expenses can be tiring and take a lot of time.

 

 

And that time might be better off spent investing in learning, finding or talking to prospective customers/clients.

 

In other words time spent working on the business, not ‘in’ the business.

 

HMRC allow self employed individuals and partnerships to use simplified expenses.

Simplified expenses are a way of calculating some of your business expenses using flat rates instead of working out your actual business costs.

 

Types of expenses

You can use flat rates for these expenses:

  • working from home
  • business costs for vehicles
  • living in your business premises

FYI: You must calculate all other expenses by working out the actual costs.

 

First, let’s check if it’s right for you and your business

HMRC have a handy guide here which will help you decide if using simplified expenses is the best option.

You can also call us on 0330 22 11 026 or chat to our team 24/7 on the live chat if you’d like to discuss this. Note that we cannot provide specific advice to people who are not our clients.

 

How to use simplified expenses

Record your business mileage, hours that you work at home, and how many people live at your business premises.

Then at the end of the tax year (6th April), use these flat rates:

Business mileage

Working from home

Living at your business premises

Then add them to your self assessment tax return – or use our Dead Simple 5 star rated service! Just click here

 

Thanks for reading – we’ll be adding further blogs soon.

 

Are gifts to customers tax deductible?

If you follow a few simple rules, you will be able to get tax relief on your businesses Christmas gifts to clients & suppliers:

1 : The gift can’t be food, drink, tobacco or a token/voucher exchangeable for goods.

2:   The gift itself must carry an advertisement for your business. A business logo would be perfect for this – but make sure the logo is actually on the item itself, so not just on the packaging.

3:   The cost of the gift must not exceed £50 – and the total cost of gifts to the same recipient must not exceed £50 in your accounting period.

Follow these 3 rules and you can treat the cost as an allowable expense for tax purposes.

 

VAT

If you’re VAT registered then any VAT on these gifts is also recoverable, but again it’s subject to the above rules being followed.

Any gifts made to clients / customers that do not meet these rules would be treated as business entertaining and would not be allowable for tax.

 

These rules apply to sole traders and other unincorporated businesses, as well as to limited companies.

 

 

Thanks for reading and be sure to head back to our blog for tax saving tips, and musings about business and finance.

 

The Dead Simple Accounting Team

0330 22 11 026

info@DeadSimpleAccounting.co.uk