Wednesday, 12 August 2015

What can I run through my business


There are pros and cons to running your own business. The cons come in the shape of stress, hard work and a constant worry. The pros are working for yourself and you can run some things through your books. However, just what can you run through your books? Because you pay your tax on your profits, it is usually a good idea to look at ways to reduce that profit. So popping in legitimate expenses can save you quite a bit.
The biggest thing has to be the car or vehicle. You are probably aware that you can claim 45p for the first 10 000 miles and 25p for each mile after. Did you know you can claim 24p per mile on a Motorbike, with no limits and even 20p per mile for a push bike!
Office equipment and consumables are another big expense. Naturally things like printer cartridges are key to running a business, so claim those. But you can also buy equipment off yourself, like an iPad for example. If you buy that from yourself it becomes a company asset, making it a claimable expense. To make it even better, you get reimbursed from your company for that amount, without incurring tax.
Some of the other things start to get a little complicated, and you will need to talk to your accountant about them. Lots of business owners miss out on capital allowances. When you can't claim some expenses it could worth while looking to see if you can claim capital allowance.
Rent is also a complicated one. You can only claim for the area dedicated to the business. So, if you have an office that takes up 10% of your home, you can claim 10% of the cost. But of course, it isn't as simple as that. If the room is your office for only half of the time, you can only claim half of the cost... The utilities work in a very similar way. There have been many cases of people getting into issues with their phone line and broadband etc. Take some accountant advice on that one.

Some of our Accountant friends have told us the simple way to look at it is, if you can prove it as an expense then fine if you can't don't risk it. You have to keep receipts, invoices and any other paperwork for 6 years after you have claimed. If you can't prove that expense, HMRC could ask you to pay it back. The Government have got pretty good at giving simple advice on all these kind of things. If you want to know a bit more you can find out everything you need to know here https://www.gov.uk/tax-relief-for-employees/overview or as we have said ask your accountant.







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