Expenses To Know About for Your Self-Assessment
Remember to file your self-assessment before the end of January 2024, and it’s always better to do this before Christmas. Those who file their return before 30 December may also have the option of paying any tax owed through their PAYE tax code thereby spreading the cost.
Filing early also means that if customers owe money, they have plenty of time to explore which of the payment options available is best for them.
Here’s a weird statistic – did you know that 2700 taxpayers filed their tax returns on Christmas day in 2022? (not even Annja is that keen😊).
Unfortunately, Anlo will be closed on Christmas day, but if you just want to eat your Christmas dinner in peace, send us your information and we will get it done quickly and accurately 😊
Expenses that you should not forget about or miss when you have a limited company or your self-assessment
1) Limited company policy medical insurance
The policy can be paid from the limited company bank account, but the company will still need to pay NI Class A1 on the taxable benefit of the expenses. Also remember that the taxable benefit has to be included in the employee’s self-assessment.
2) Pension Fund contributions
Most pension contributions are made net of basic rate tax, but you need to include them in your tax return to get any higher rate tax relief that’s due.
Company director pension contributions are an allowable business expense providing the employer contributions passes the 'wholly and exclusively' test, meaning that HMRC deems the employer pension contribution to be wholly and exclusively for the employer's trade or profession.
3) Training costs incurred
Allowable training costs are claimed as a deduction when calculating taxable business profits. HMRC are quite particular about certain types of training. Tax relief on MBA course fees, for example, often aren’t allowed because an MBA is deemed to be offering new skills and knowledge.
However, if the new skills and knowledge are incurred to generate more revenue for the business, then the expense will be deductible for tax purposes.
4) Home office expenses
You can either claim deemed home office expenses or actuals costs incurred. If you are a sole-trader then the home office expenses that can be claimed are –
heating,
electricity,
council tax,
mortgage interest or rent,
internet and telephone
limited to the space used for business purposes.
If you are a director or shareholder of a limited company, working from home, the home office expenses are
heating and electricity,
internet, and telephone
limited to the space used for business purposes. Mortgage interest and rent is excluded as these expenses would have been incurred regardless of if the director or shareholder worked from home. This is stipulated in EIM01474
5) Travel costs incurred
If you ever use your car for business, you can claim part of your running costs. Even quite occasional use is worth a claim: does your accountant know about it?
Directors and other employees can claim any shortfall between HMRC’s approved mileage rates and amounts reimbursed by their employers if they use their car for business. And don’t forget you can claim an extra 5p per mile if you take another director or employee in your own private car on a business journey.
6) Gift aid payments
If you’re a higher rate taxpayer, gift aid payments will save you tax, but your accountant won’t know about them unless you tell them. Don’t forget to include entry fees for museums, zoos, etc – these are often paid under gift aid. You could also include gift aid payments made since 6th April – these can be carried back to last year.
7) Expenses that relate to the business, that was paid personally
i.e. Apple subscription for applications used in your business, but is paid through your personal bank account i.e. Canva etc.
8) Don’t have the documents?
Still tell us about these expenses as we can use policy documents or personal bank statements to still account for these expenses.
9) Family payments
Did you pay your spouse, partner, or children for some work in your business? Tell your accountant about it. If you didn’t pay them last year, ask if it’s something you should consider this year. All expenses incurred in the production of income should be considered for tax purposes 😊
10) Books and Subscriptions
Professional subscriptions related to your business are deductible. This applies not only to sole traders and business partners, but also to directors and other employees who pay their own subscriptions personally.