Amy Taylor Accountancy

Budget 2013 summary for small businesses

Amy Taylor — Thu, 21 Mar 2013 09:33:56 +0000

Headlines

The personal allowance will increase to £10,000 from 5^th April 2014 meaning the first £10,000 you earn personally will not be taxed.
New scheme for tax free childcare meaning that from April 2015 you may claim up to £1,200 per child towards your childcare bills if you are a working parent. This will apply to under 5s only to start with. If you are already in an employer operated childcare voucher scheme, you may remain in this until the new scheme comes into effect.
An allowance of £2,000 per year will be available for all businesses and charities to be offset against their employer Class 1 NIC liability from April 2014 which may assist not only in reducing your NIC bills if you employ staff, but may give us some further opportunities for more tax efficient extraction of funds for solo/ two director companies.

Other key issues

Some of the changes detailed yesterday were the subject of earlier announcements. Here is a reminder of some of the more important ones:

Capital allowances and cars

For sole traders or limited company owners, if you are thinking of buying a car this year, which you will be using for business, note that you may still be able to claim a 100% first year allowance (FYA) if the can has low emission cars The availability of a 100% FYA is to continue for purchases as follows:

for the two years from 1 April 2013 to 31 March 2015 but only where emissions do not exceed 95gm/km and then
for a further three years from 1 April 2015 to 31 March 2018 but only where emissions do not exceed 75gm/km.

You should check with your accountant if you are thinking of buying a car with limited company funds, that is a company car, so that we may advise you as to the benefits in kind associated with such a purchase.

Computing taxable profits on a cash basis for smaller businesses

An optional basis for computing taxable profits is to be introduced for small unincorporated businesses for the 2013/14 tax year onwards. We think this is great news for some of our smaller sole trader businesses as it will give us an opportunity to produce simplified accounts and reduce our fees!

The key aspects of the cash basis are that:

smallbusinesses would be taxed on their cash receipts less cash payments of allowable expenses, subject to a number of tax adjustments
it is only available to unincorporated businesses
it is an optional scheme and requires an election by the owner(s) of a business
businesses can enter the cash basis if their receipts for the year are less than the amount of the VAT registration threshold (currently £77,000) or twice that (currently £154,000) for recipients of Universal Credit.

In response to feedback on the draft legislation that was issued for consultation in December 2012, HMRC has made some design changes to the legislation including:

businesses using the cash basis will continue to do so until their circumstances change so that the cash basis is no longer suitable for them
businesses using the cash basis will not have to use flat rate expense rates for their cars.

No detail has been provided on the circumstances in which a business will no longer be able to use the cash basis.

Flat rate expenses

As part of the simplification for unincorporated businesses, legislation is being introduced to allow two deductions to be based on fixed rates, rather than actual costs. The rules apply from 2013/14 onwards.

Flat rate expenses will be available for business use of a home. Provided certain conditions are satisfied, the following monthly rates will be allowed:

Business use in a month	Deduction
25 hours or more	£10
51 hours or more	£18
101 hours or more	£26

However, we still believe that claiming a proportion of your actual household bills will work out to be more beneficial, but this method may suit those who do not have access to their utility bills for the year.

This is a summary of some of the key changes we expect to affect you and does not cover everything from yesterdays budget. Should you require further information in any of these areas, please let me know.

Come and like me on facebook to get more tax tips, special offers and discounts www.facebook.com/amytayloraccountancy. Or contact me now on 01767 260282 or amy@tayloraccountancy.net, www.tayloraccountancy.net.

Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy. You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.

How to calculate your profit correctly

Amy Taylor — Wed, 27 Feb 2013 08:10:09 +0000

Calculating your profit correctly depends on a multitude of factors, such as making sure your records of income and expense are complete, making sure you don’t forget to include items you’ve bought out of your own personal funds, etc. Another key area to consider when preparing your accounts, and your taxable profit, is the accruals basis. Fundamentally, this means getting your income and expenses into the right year end.

If you have a service based business, such as a Virtual Assistance business, it is very likely that you will have ongoing projects where you may even take the money up front (good for your cashflow too if you do!). When you get to the year end, we’ll assume this is 5 April, you may have projects where you have completed say 50% of the work, but have billed them already for 100%, or you may not have even billed them at all.

Where this is the case, you should make sure that the income you include in your accounts is the true reflection of the proportion of work completed and billable, often referred to as Work In Progress. So in the example above, you should include 50% of the income regardless of how much you have actually billed your client.

The same principle applies to your expenses. If you know you have received a good or service before the year end but haven’t paid for it until after the year end, you should make an accrual in your expenses for it. So for example, a VA did some work for me which was completed by 30th March, but I did not receive her bill until 15th April. When preparing my accounts, I made sure I included the expense in the earlier year end.

If you are paying for insurance, and other lump sum annual expenses, you will also need to adjust your figures to make sure you only include the amount relating to the appropriate year end. So if you took out annual insurance for £240 on 5th March, you would include only one month’s worth of expense, £20, in the first year end.

VAT for small businesses

Amy Taylor — Wed, 27 Feb 2013 06:50:39 +0000

It’s important to monitor your turnover when you are a small business and check whether you have exceeded the VAT threshold or not. You have to look back at the last 12 calendar months to do this, not your accounting year. When you look back at the last 12 calendar months, if your turnover, ie sales before adding any tax, was over £77,000, you need to register. You should also register if your turnover is likely to exceed £77,000 in the next 30 days, or if you have acquisitions from other member states over £77,000. You may even want to register voluntarily if you make significant VAT inclusive purchases and sell mainly to VAT registered customers.

If you make sales through paypal, make sure that you add any paypal fees back on to your sales to get your true turnover figure, a point that many online businesses miss.

It is important to register as soon as you become liable, as if you fail to do so, you will have to pay a penalty and any VAT that should have been collected on sales you have made from the date you should have been registered from. This has happened to a client of mine recently, who fortunately was able to charge the missed VAT onto his VAT registered client, however, if your clients are not VAT registered this would not be an option and you would have to bear the cost yourself.

Bear in mind that if many of your customers are consumers, then any VAT registration means putting up your prices straightaway, or absorbing the VAT charge yourself – a very difficult decision that many businesses have to face at this time.

On the upside, there are a number of schemes around to help small businesses with VAT and I particularly like the flat rate scheme. It is so simple to run and means you don’t have to worry too much about what you can and can’t claim. Flat rate schemes are open to businesses with turnovers of less than £150k and you apply a flat percentage to your gross sales (ie VAT inclusive sales) and pay this over to HMRC. The percentage varies according to which industry you are in and you are eligible for a 1% reduction in the first year of belonging to the scheme. You can also reclaim any VAT on capital items where the value including VAT is over £2k.

The annual scheme is also a good one, which you can run alongside the flat rate scheme. This annual scheme means that you pay regular quarterly estimated amounts of VAT to HMRC, followed by one balancing payment or refund at year end. It means that it is easier to budget for your VAT payments during the year, and you only have to complete one VAT return.

The recommendations for the flat rate scheme and annual scheme may not be appropriate for all businesses, and you should read the guidance on HMRC’s website or check with your accountant before you decide whether these schemes are right for you.

Whichever scheme you choose, you can claim back VAT on supplies made 3 years before you registered, if you still have the goods in your business, or on services paid for in the 6 months prior to registration.

There are some items which you can never reclaim VAT on, the most widely known being a car unless it is absolutely totally used for business and never ever for personal. Business entertainment is another area where VAT cannot be reclaimed under any circumstances although if you are entertaining your own staff, that’s OK.

VAT is an extremely complex area. If you would like any advice in this area or any other areas of accounting or tax, please contact me on 01767 260282 or amy@tayloraccountancy.net, www.tayloraccountancy.net.

Come and like me on facebook to get more tax tips, special offers and discounts www.facebook.com/amytayloraccountancy.

Why should I forecast Cashflow and how should I do it?

Amy Taylor — Wed, 27 Feb 2013 06:44:16 +0000

Cashflow forecasting is essential to any business to make sure you have the funds when you need them, work out when you might require temporary finance, and sort out how much you can take out of the business. Follow my steps below to work out how you can accurately forecast your businesses finances to give you greater financial control.

1. Make your own template. Set up a simple spreadsheet or grid on a piece of paper, with all the remaining months of the year along the top as your column headings. Let’s go through the row headings in the next few steps. Make sure you always record the cash position of each transaction, for example if your customers do not pay for 2 months, include the cash in your forecast when you are going to receive it, not in the month you make the sale.

2. Fixed costs. Although most cashflow statements start with income, I think its more important to understand your cost base first and foremost. Fixed costs are all those expenses that you are 100% committed to and that are not dependent on your level of sales. So in my business, the tax software I buy is a fixed cost as it covers completion of unlimited tax returns, but my paper would not be a fixed cost as that does depend on how many sets of accounts and tax returns I do, and therefore print. Here are some examples of fixed costs :

a) Assets that you will need to replace or purchase over coming months that are not dependent on level of sales, for example a new computer/ filing cabinet.

b) Rent

c) Business insurances

d) Software licences

e) Professional subscriptions and memberships

f) Advertising and promotion

g) Legal and accountancy

h) Interest and other finance charges

3. Income. Now let’s turn to money coming in to make sure there is at least enough to cover what’s going out. Firstly note down your regular customers or level of sales, ie the minimum you know you will have coming in. To forecast accurately what you expect in new business is always going to be more difficult, but you should look at previous sales won, or the growth pattern of your recent sales, to forecast forward to the future. For example, if you are in the lingerie business and started off with sales of 20 bras a month, 30 the next, then 40 and so on, it would be reasonable to assume a trend of an additional 10 a month until you reach what you would consider to be a maximum level of sales.

4. Variable costs. Now factor in your variable costs. These are costs that depend on your level of sales. So in my example above, the cost of the bras would be a cost of sales and therefore a variable cost. But there could be other variable costs, such as the cost of packing and posting the bras to the customer, labour costs, storage costs, etc,. Give each row under the heading variable costs a label depending on the type of cost. Some more examples of variable costs are given below:

a) Travel expenses (could be fixed or variable depending on your business requirements)

b) Admin expenses (eg paper to print invoices, postage, etc)

c) Utility bills (if you rent premises or work from home and your usage is dependent on your level of sales)

d) Paypal charges

5. Timing. Now you might need to re-jig your figures slightly. If you are not a cash on delivery type of business, you may allow your customers 30 days credit. If this is the case, shift all your income figures into the month after you sold them. Similarly if your suppliers give you credit, for example the bra supplier allows you 60 days credit as you are such a reliable customer, you can move that variable cost back a couple of months

6. Sensitivity analysis. A very big word for adjusting your assumptions slightly. So in my lingerie example, even though sales had been increasing at 10 per month, the owners might expect that due to a downturn, this rate will only be 2 per month going forward, so they might tweak their figures and have a “pessimistic” view. Alternately, if you think you might get more sales than your forecast, work out an “optimistic” version.

7. Money for you. Finally, work out what’s left after deducting your fixed and variable costs from your profit. If it’s a positive number, this is the money that is available for you to take out of the business as drawings (if you are a limited company this is roughly what you can take as a dividend, but check with your accountant first). If the number is negative in any individual month, this is where you will need to take out extra finance, or re-jig your fixed costs if possible.

8. Make sure you factor in all the tax payments that are due and the timings as they are all very different. Also, make sure you allow for payments on account if you are a sole trader which can take you by surprise the first time.

Do you use cashflow forecasts in your business? What do you find difficult about them? Have you got any tips for any readers of how to create a good cashflow statement?

Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.

Mums working from home – what can you claim?

Amy Taylor — Tue, 26 Feb 2013 19:34:46 +0000

If you are a self-employed sole trader mumpreneur and use part of your home for business, you can offset certain utility expenses and mortgage interest against your income, but in order for these to be allowable expenses for your business, the bills must either be partly or wholly in your name. If the bills are in your husband’s name, you will have to pay him your share of utility bills in order for them to be allowed as a tax deductible expenses against your business! The way I do it, is assess my usage of the house for business each month, and then make a payment from my business account to my husband’s current account to provide an audit trail should HMRC ever ask any questions.

The other issue to be careful of when claiming the costs of working from home is Capital Gains Tax if you claim exclusive business use. Say you use one of your 6 rooms in the house solely for business and claim one sixth of ALL your utility bills and mortgage interest as allowable expenses, when you come to sell your house, one sixth of any gain you make on the sale of the house could be subject to capital gains tax at 18%. There are allowances that could reduce the amount of any capital gains tax to pay depending on your circumstances and you should consult an accountant for more details.

However, many of us balance our laptops on half a dining table, or are in a room where the kids keep their toybox, and so we have to share our work environment with the rest of the family. This non-exclusive business use means that we can claim for the expenses of the proportion of the house we work in, but will not be at risk of suffering Capital Gains Tax later. HMRC have given us some examples of how to calculate how much you can offset against income at http://www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm. These calculations are based on the amount of the house used for business, and the amount of time the room is used for business.

An alternative to the complex calculations above would be to put in a claim of £4 a week for the expenses of working from home , excluding any periods where you are on holiday or working at a temporary workplace. The £4 a week claim has been accepted by HMRC as reasonable for a self-employed person working from home and is unlikely to be challenged.

Don’t forget that you can also claim for the costs of decorating and kitting out your office. Again you may want to make a deduction for personal use, for example if the room is occassionally used by the rest of the family.

If you work for a limited company and your limited company does not provide you with an office, you can also offset the expenses of working from home, work out your household expenses using the calculations over the amount of your house being used, or charge your limited company rent. In the case of the former, you can either make payment to yourself for the proportion of business utliity expenses (or £4 a week) from the limited company or you can claim it on your self-assessment form as a business expense. If you charge your limited company rent, this will be tax deductible for corporation tax on the company, but you will have to declare it on your self-assessment form as rental income. Having a commercial rental agreement in place will be important, as will checking that such a commercial arrangement will not point you towards business rates.

Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.

P11Ds – what are they and why should I get a dispensation

Amy Taylor — Tue, 26 Feb 2013 12:49:09 +0000

P11D is the name given to a form where you record all non-cash income you have received from the company, whether or not you derive a personal benefit. These forms must be submitted by 6 July for ALL limited company DIRECTORS*. Any Class 1A NICs due as a result of P11D benefits must be paid by 22 July. Here are some examples of what should be included on your P11D:

All expenses reimbursed to you by the company for business expenses incurred for you personally, whether or not you physically withdraw the cash or not. Typical expenses that you might incur personally that are actually for business could be travel, entertainment, and other general expenses. These must all be recorded in your books and on your P11D. Because these are genuine business expenses, you should then record the expenses incurred, and claim back the relevant amount, on your self-assessment return to avoid being taxed on a benefit.
All business expenses the company meets on your behalf. For example, one of my clients uses Virgin Trains for business travel, and all the expenses of these journeys are paid for directly from the company bank account. This would again be recorded on the P11D, and again form a genuine expense deduction on your self-assessment return. Other common examples of the company paying for genuine business expenses for you personally would be entertaining, subsistence, etc,.
All personal expenses the company meets on your behalf. For example, one of my clients has a snack box delivered to her every day which the company pays for. She reimburses the company for it via her directors loan account. These items need to be recorded on the P11D and a note made of the amount reimbursed. If she did not reimburse the company, this would be a benefit-in-kind and she would be taxed for it on her self-assessment return.
Company car benefits must also go on your P11D, and these will attract a tax and Class1NIC liability. It is often better to keep your own car personally and charge the company mileage instead.

It is possible to apply for a P11D dispensation whereby you agree to adhere to certain rules, and, if accepted by HMRC, this precludes the need to do P11D’s from the date the dispensation is agreed. This is obviously a great time saver, and means that HMRC are made aware of the types of expenses you have in your business, and that these are for business only.

* There may be some situations where directors do not need to complete a P11D such as if they on less than 5% of the share capital or are director of charity or on-profit organisation.

Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.

What taxes do I need to pay and when?

Amy Taylor — Tue, 26 Feb 2013 09:08:13 +0000

Taxes you pay as a sole trader or partnership

As a sole trader or partner, you will be taxed on the profits you make from your self-employment. In a partnership, you would be taxed on your share in the partnership profits.

The good news is that the first £8,105 you earn (2012-13 rate shown) is tax free. This is known as your personal allowance. The next amount of income you earn, up to £34,370 (2012-13 rate shown) is taxed at 20%, and anything above that is taxed at 40%. There are some special rules for high earners (over £100,000), but these are outside the scope of this blog.

You are also required to pay Class 2 National insurance of £2.65 per week, and this is collect in bi-annual instalments on 31st January and 31st July of each year.

Class 4 National insurance is due on your prpfits from self-employment and this is 9% of all profits over £7,605 (over £42,475 you will pay 2% Class 4 NICs).

Your income tax and class 4 national insurance payments are due on 31st January following the end of the tax year, and if you are making payments on account, you will have additional payments to make on the 31st July following that.

To get an idea of how much tax you might have to pay, take a look at HMRC’s useful ready reckoner : http://www.hmrc.gov.uk/tools/sa-ready-reckoner/calculator.htm.

Child benefit tax charge

Where a taxpayer has children and earns over £50k they may also face an additional tax charge in respect of child benefit from 7th January 2013. For further details see my blog http://www.tayloraccountancy.net/2012/03/22/budget-2012-child-benefit-changes/

Tax for older taxpayers

When you are over state retirement age you are exempt from Class 2 and Class 4 NICs. If you are aged over 65 at the end of the tax year you are also entitled to a higher personal allowance, however, this can be reduced where your income is over a certain threshold.

For more information on how we can help you calculate your tax bills and other services click here and request a callback http://www.tayloraccountancy.net/contact-us/

Introduction to accounts and Financial Statements

Amy Taylor — Tue, 26 Feb 2013 08:59:35 +0000

The accruals concept

Accountants use the UK GAAP (UK Generally Accepted Accounting Principles) to prepare accounts which includes adopting the accruals basis. This means you record transactions as the liability or asset falls due or is receivable. The benefit of accounting in this way is that you bring expenses incurred but not yet paid for into your allowable expenses, and the amount that is yet to be paid is recorded in your balance sheet as creditors. However, you must also bring in the value of any work in progress that has not been billed before the end of the year, and record any work not yet paid for in your debtors figure.

Financial statements

A set of financial statements will typically include a Profit and Loss Account which records the income and expenditure for the year, and a balance sheet, which shows the historical cost of any assets used in the business, and other assets and liabilities. Financial statements can be used as a basis for completing your tax return, as well as showing potential investors something of the financial standing of your business.

If you have a business which holds stock, you should conduct a stock take at each year end. The amount of stock you have should be valued at the lower of cost or net realisable value, and the increase in stock year on year will be deducted from your purchases figure before you include it in your tax return.

A balance sheet will also include your fixed assets, prepayments, other liabilities and the amount of capital and drawings you have contributed or taken out of the business. It can provide a useful snapshot of the financial health of your business.

Calculating taxable profits

The profit that your business has made for the year will be shown as the total of your income minus your expenses and many accounting software packages will allow you to report your own profit and loss account. However, this profit figure will not always be the same as the one you will put on your tax return because of certain adjustments required to reach your taxable profit.

For example, in your accounts, you would want to reflect the total assets being used in your business which would include the written down value of any fixed assets. This could be different to the amount you offset in capital allowances. Also, your accounts may include the full value of stationery, but actually, you may have used some of that stationery for your own personal use, in which case an adjustment for personal use is required to reach your taxable profit.

Getting your profit right depends on a multitude of factors, such as making sure your records of income and expense are complete, making sure you don’t forget to include items you’ve bought out of your own personal funds, etc. Another key area to consider when preparing your accounts, and your taxable profit, is the accruals basis. Fundamentally, this means getting your income and expenses into the right year end.

Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.

What you need to know about bank accounts and reconciliations

Amy Taylor — Tue, 26 Feb 2013 07:38:47 +0000

Although not mandatory for sole traders, it is certainly advisable to have a separate bank account for your business transactions as this allows you much greater control over your finances. By maintaining a separate bank account, you will be able to introduce financial controls, such as bank reconciliations, and be better able to monitor your cashflow.

Business bank accounts are much more flexible than they used to be and several banks now offer free banking, subject to terms and conditions. Type “free business banking” into Google to get a list of the latest offers. Another tip is to pay for items using a credit or debit card linked to your business account. If you were to lose a receipt, you could then prove to HMRC that the payment was to your usual supplier for business items, and therefore a genuine business cost.

If the bank you choose does charge you, look carefully at what those charges are for and plan for them. For example, if you get charged every time you bank a cheque, try to convert your customers to paying you by BACs which is often free. If you are getting charged every time you go into overdraft, consider getting a bank loan which may give you a better rate and value for money.

Month end procedures

At the end of each month at least, you should tick off the sales you have invoiced to the cash coming in to your bank account, and a similar process with your expenses. This will enable you to chase late payments from debtors, or check up on missing payments to suppliers. You should also reconcile the balance on your bank account to the balance showing in your cash book; your cash book being what you would expect your bank balance to look like based on the income and expenditure you know you have received or made. In an ideal world, the bank balance and cash book balance would be the same but in reality there will be timing differences or missing items that will mean the two balances are different. Methodically mark off each item from your cash book as it clears your bank statement. Investigate any differences and make an amending entry in your cash book, such as bank interest or charges. See the example below:

	£
Balance per bank statement dated 31 December 2011	5,000
Cheque paid and recorded in cash book, not yet cleared in bank statement	(200)
Income deposited and recorded in cash book, not yet cleared on bank statement	500
Bank interest charged on bank statement, not in cash book	10
Balance per cash book dated 31 December 2011	5,310

This whole reconciliation process is made much easier if you have an accounting system which integrates with your bank account, such as Xero (www.xero.com).

Do you have any recommendations as to banks to use or not to use for business?

Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.

Mumpreneurs – expenses we should be careful of claiming for tax

Amy Taylor — Tue, 26 Feb 2013 06:45:37 +0000

As cost conscious Mumpreneurs, we want to make sure we are claiming all the expenses we possibly can against our income to bring our tax bills down. However, it’s important not to claim the wrong expenses or you could pay the wrong amount of tax and there could be trouble with HMRC further down the line.

Here are some common areas where expenses are not allowed:

1. Client/ Supplier Entertaining. Any expenses you incur entertaining your customers or suppliers are disallowed and should be added back to your profits. To many of us, this seems so unfair as what could be more genuine as a business expense than taking out a new customer? It was only when people started claiming for football tickets, ski-ing trips etc as business entertainment that HMRC disallowed the whole lot! However, if you are entertaining your staff, for example a Christmas party, you are allowed to claim £150 per head per annum, and this will not be treated as a perk on the employee.

2. Gifts. Gifts to customers and suppliers are not allowable unless they promote your services and are worth less than £50. The promotion should be prominent and conspicuously displayed on the gift. There are other rules regarding the permanency of the gift (items such as food would not be allowable either). Gifts are also sometimes allowed when they can be proven to be a cost of sale, for example if the gift is given at the same time as the product purchased.

3. Work clothes. Generally disallowed on the basis that they have a dual purpose, for example the need to be warm, decent(!) and dress well, as well as the specific business need. There was a case a few years ago where a barrister argues that her black robes should be tax deductible, but this failed in the courts. There could be an argument for claiming uniform or protective clothing, etc, but there are a few rules around these so consult your accountant if you’re unsure.

4. Childcare. Sole traders cannot use the childcare voucher scheme which is available to employed people. There are no tax deductions available for childcare costs if you are self-employed. The expense is not regarded as having been incurred for the purpose of the trade. If you have a limited company though, why not set up your own childcare voucher scheme, and get tax relief of the costs of the scheme, with a tax free benefit for you? (Note that this will only be of benefit if you are actually paying income tax which most of my limited company director clients are not due to careful tax planning)

5. Tax and NI payments. Again, these are not deductible against your profits for tax purposes.

Are there any expenses that you are unsure as to whether you can claim them or not?