Expenses tips for the self-employed
23 January 2012
Advice has been offered to those paying self employed taxes to help them ahead of the self-assessment deadline.
With the January 31st cut-off date fast approaching, many newly self-employed could be confused as to what travel and accommodation costs they can and can't expense.
Emily Coltman, chief accountant to FreeAgent, told Bytestart that there are a few tips to understanding expenses and taxes.
First of all, consider the purpose of the journey.
If it was just for business – to pick up files or visit a client – the whole trip, including overnight stays, can be expensed.
However, the complexity arises from when the journey also has a private element.
When this is the case, those paying self-employed taxes need to consider if the private use was incidental, separable or inseparable.
Incidental private use can be completely expensed, mixed journeys that are separable can be expensed for the business element, but those where no separation is possible cannot be expensed despite the business use.
Andrew Shaw, head of personal tax at accountants Kingston Smith LLP, also warned people to check their P800s are correct rather than just assuming they are.
Filed under: self employed, self employment taxes