I am Self Employed - What can I legitimately charge against Tax

  wee eddie 16:19 20 Nov 2013

I drive my own Taxi, a Peugeot E7 Hackney Cab: I have a good Firm of Accountant that I have been with for the last 33 years and they have looked after me well, but are a bit vague in this area.

What Computer related items do you think I can legitimately charge as a Business Expense. How far can I push the boundaries without risking an investigation!

How often can I replace my PC and need it be an Office Machine or could I get away with a Gamer?

I use Word and Excel, so obviously M$ Office.

I need to Back-up my Accounts so Back-up Software and an External Hard Drive, maybe 2!

My ISP and Telephone Line and Anti Virus Software.

Obviously I already charge for the Mobile Phone that I use in the Cab.

Any other Computer related Items might one suggest that I could charge!

  Forum Editor 16:27 21 Nov 2013

All this is something that your accountant can tell you - it's pretty basic stuff in accountancy terms.

We're not qualified to give that kind of advice, and in any case it depends on individual circumstances. Talk to your accountant, it's what you pay him/her for.

  wee eddie 11:14 22 Nov 2013

FE, thanks for your response, I thought I'd explained in my first sentence that my Accountants are somewhat vague in this area. I have been using the firm for some 33 years and maybe they have become too large/smart for the small Trader I now am and should change.

However, back to the question, I am trying to discover, from other small Traders, what they think that the limits are on what I can buy.

My Accountant has said: "Buy it and I will tell you if it is acceptable to HMR&C".

Now I quite fancy the Mesh Range of Silent PCs, but if I buy one of these 9not cheap) and he says, "No that's not acceptable" I could end up paying the whole bill out of Taxed Income, which is against my religion!

For example, I don't currently charge my Landline and ISP against tax, even though I need it to keep in contact with the Licensing Authorities. I could but then maybe they'd want to make an allocation for personal use. However I do charge the full cost of my mobile, without making any allocation for personal use. I believe that they view that as a "Prid pro Quo"

Also, my Accountant charges more for his time that we, The Forum Users, do and I'd like to reduce the amount of time/fees I spend asking him questions.

  Forum Editor 21:13 22 Nov 2013

So often the answer to questions like these is that you can reckon on a proportion of the total cost being an allowable charge against your tax liability. That's why I made the point about it depending on individual circumstances.

As you can imagine, HMRC have an enormous amount of experience when it comes to knowing just how much each kind of occupation can reasonably claim is a legitimate business expense. Run an online retailing business and you could rightly claim that all your computer-related costs are a part of the running costs. The same certainly wouldn't hold good if you were a landscape gardener, for instance.

If you have used the same accountant for 33 years I would have thought that you are entitled to be a little pushy about getting some helpful answers relative to your particular set of circumstances.

  wee eddie 12:08 23 Nov 2013

Thanks FE, a comprehensive answer.

  spuds 15:12 30 Nov 2013

Being with the same accountant for 33 years might not always be the wisest of moves, especially for the small business owner.

Have you thought about contacting someone like the Federation of Small Businesses, because through their membership, they offer all sorts of advice, help and support, including legal and taxation. click here What will happen if Scotland gets Independence. Will the tax laws for Scotland change also ;O(

  bumpkin 18:21 08 Dec 2013

FE informed

  TV-Repairman 20:57 18 Dec 2013

As I'm self-employed I can tell you that you can claim for capital equipment including computer (for keeping accounts, printing receipts, adverts, web site, etc.) and all peripherals (2 x backup drives, printer, scanner). Also all repairs and replacements. A computer normally has a write-off of about 3 years. Likewise printer etc. The taxman isn't going to quibble about the cost. A decent Apple Mac could cost well over £1000.

You should also be claiming for all consumables including paper, ink, business cards, business-related periodicals, A-Z, maps (new each year).

If you also decide to run a sideline business (e.g. writing, photography, web design) you can claim for items related to that, too. The computer used for accounts would sensibly be kept separate and not connected to the Internet, for security reasons. So you'd need a second computer for other work. In fact I run three computers and two laptops. I assume you also need a SatNav (two because you need a spare in case one fails).

I have just ordered three second-hand computers (one a laptop) because I run them off a photovoltaic-powered electricity supply* and need to conserve energy. It's all legitimate. On average I probably buy two computers a year - usually second-hand but occasionally new.

*A fairly expensive battery-inverter system that keeps my office running for up to ten hours during a power cut and also protects the computers (and data) against mains power surges and "brown-outs".

I hope this gives you some ideas.

  wee eddie 22:19 18 Dec 2013

Thanks Mr TV. I like your analysis of the Back up solution and the 3 year write off period. Neither possibility was mentioned by my Accounts

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