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Couple of tax questions?

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  • Couple of tax questions?

    Firstly: Unreciepted Expenditiure.

    What do you do about it?

    Just declared myself self-employed today. I know I'm supposed to keep records of what I spend along with reciepts for 7 years in case IR want to have a poke around. What do I do about expenditure for which I have no reciepts. I buy quite a lot of my wood, materials, and tools second hand, often from private sellers, and often can't give reciepts.

    Anyone know if this is likely to cause a problem at any point, and if so what can I do about it?

    Secondly: Car issues.

    At some point I'm going to have to get a bigger car as my current one isn't really big enough to get all my stuff to and from craft fairs and shows. The car will also be my everyday motor.

    Can this be claimed as an expense for Tax offset purposes?

    Sorry if either of these are stupid questions, still got a lot to learn.

    Hopefully going to go on an IR or Business Link course when I get a spare minute. - Unusual Handcrafted Wooden Creations.

  • #2
    They should be able to give you some kind of receipt even if it's just on a scrap bit of paper with there name, address, date, what you've bought and the amount.

    As for the car you'll only beable to offset a small %, this would be worked out based on the amount of days you do craft fairs in the year (i think, don't quote me on it), it's not my main job in the accountants i work in as i'm now running the VAT department and only do the occasional set of accounts (mainly for pubs or farmers).
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    • #3
      I beleieve having the official receipt isnt a necessity as long as you make your own record/receipt with as much detail on it as possible.

      What kind of company doesnt give out receipts!!!?

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      • #4
        My husband is self employed and he doesn't put the car through his taxes because (I don't know exactly how) he says that it makes more financial benefit not to put it through because the money benefit is offset by the hassle of claiming back and then other tax benefits are affected but again not totally sure what.

        Not much use but hope it helps a bit.



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        • #5
          First receipts.... Simple a scrap of paper written by the person you bought it off is fine! ...

          Cars are interesting... A car is a asset... Almost all car decrease in value over time which equals a person asset depreciation...

          What you need to lookup is the % you can put against tax regarding your car.. I can't remeber off the top of my as my account sorts all that out thank god...

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          • #6
            Car Expenses

            Working out percentages with cars is a nightmare and very diffulcult to substantiate if ever it gets queried.

            The easiest thing to do is make a note of your mileage and "charge" 40p a mile to your accounts, for a 20 mile trip that would be £8.00 (current Inland Revenue maximum per mile). Thats up to 10,000 miles per year (or £4000), anything above 10,000 you can claim a maximum of 25p. Just keep notes in your diary of where you've been and how far it was.

            By the way, the rules are the same as if you are "employed". You can't claim for the trip to and from work.

            Hope that's helpful.



            • #7
              With regard to your 'unreceipted' purchases, I would do as advised and just ask for a simple receipt. I've bought bits and pieces at car boot sales and so on, and just asked for a simple receipt. The private sellers were all fine with this - it was the dealers who were shy of it, specially when it came to a name and address........

              Unless you're absolutely certain that you'd benefit from putting your car through the books ( remembering that it would appear as an asset on your balance sheet and be given probably straight-line depreciation each year) it can be an awful lot of hassle. I enquired about this when I first registered for self-assessment. Because I do so few miles for craft fairs and so on, and my private and business mileage ( for my employer: he pays me the flat-rate 40p per mile) far exceeds what I do running about selling cards and bits, I simply don't bother.

              I thought I'd probably spend more time working out what I'm entitled to than it was worth.

              I've just completed my two SA forms and posted 'em off. I have one for the cards and fancy bits, and one for my tiny internet business selling antique and vintage china.

              I keep very simple records on Excel spreadsheets, and tot 'em up monthly. At the end of the year, I add up the figures and get the annual total.

              The SA forms look a bit daunting, as they appear to be all things to all men, and a lot of what's in them doesn't apply to me. I couldn't believe that the Notes that were sent along with the forms were actually much longer than the form itself!


              • #8
                Been reading through all the above post and if poss can I have a little bit of help. I have been making soap for a while but now want to to register as self employed. Obviously I have quite a bit of stock materials but no receipts for these - threw away at time. Now when I start my books do I start with a £0 balance or do I try and work out how much the stock value is and start as a minus. I also paid out £250 for my safety certification which I also do not have a receipt for but obviously have the certification as proof - would this go down as a minus to start off with.

                I make these at home so can I claim for a portion of the house, electric, broadband etc.

                Sorry if this is repeating previously posts but I have been reading through and just cannot get my head round it.

                Please can anyone shred some light on this my brain hurts
                The Soap Fairy xx


                • #9
                  I'm almost sure you can put through expenses previous to your starting the business. You have three months to register so all expenses within the previous three months you can definitely declare. For instance you decide to go ahead and declare yourself at 1st May, then you can put your expenses from Feb/March/Apr as long as you say the business was started on 1st of Feb - Hope it makes sense!

                  As for the car, if it was used purely for business purposes yes, put the purchase through the business. Otherwise, keep a record of your mileage and declare that at 40p a mile.

                  I used to do this but now hire a van, so it makes it easier.
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