Very very very silly tax question

[glitterglitters]

So I'm new to freelancing and I've ended up being a tad more successful than I was expecting. It's looking like I'll earn about £12k before tax this year.


I've ended up buying a laptop specifically to work on which cost me £950. I don't use it for anything at all except work, nobody else uses it etc.

Can I claim for this against my income asa business expense? So my taxable income would be £12k minus the £950? Not sure how it works. 🙈

[Bicnod]

Yes you can. When you fill in your tax return online there will be space to declare expenses.

[glitterglitters]

Awesome! It's the only thing I've kept a record of this year as being an expense. I really wasn't expecting to need to. Definitely keeping receipts galore next year!

[pixiebaby23]

There are loads of things you can claim against tax. It might be worth you finding an accountant who wouldn't charge you the earth - you will almost certainly make back their fees.

Have you registered with hmrc as self employed btw? If not, you'll need to do so.

[njfhow]

Hi, well as you know all these things are complicated to make life difficult but yes you can claim this cost as a business expense IF you are working out your profits on what is known as the "Cash Basis". Cash basis is the simpler method as it is based on the money actually received in and paid out but only small businesses (not VAT registered etc) can use it. (The other basis some businesses use is the "accounting basis" which makes adjustments for example if you have a bill to pay but haven't paid it yet. If you use the accounting basis you cant claim the computer, you have to spread the cost over the life of the computer which is usually a few years). So back to your question, if you use the cash basis (there is a box on the tax return to say if you use the cash basis or not) then you can claim the whole cost now so long as you actually paid the full money for it during the tax year. Hope that makes some sense!

[ImperialBlether]

You can claim for accommodation, too, if you work from home. Fill in this very short questionnaire.

[BarbaraofSeville]

Have you driven anywhere for your work? You can claim 45 pence a mile if you did, but should have a record of where you went etc. It would be easy enough to put all the details in a spreadsheet, or just write in a diary.

You can also claim a token amount for use of home as office - £2 a week I think.

[BarbaraofSeville]

If the OP is only just above the tax threshold, I'm not sure she'll make back her fees this year, but something to bear in mind in future years if things take off for her.

[ImperialBlether]

Glitter, check your messages.

[BarbaraofSeville]

For hiring an accountant that is.

[ImperialBlether]

Barbara, I think it's £26 pm if you mainly work from home.

[TreeTop7]

Just a reminder that although you won't pay tax on the basis of what you've said, you'll still be liable for national insurance, which is collected via SA now. Check your statement after you've filed.

[glitterglitters]

Oh wow! Thanks so much everybody. Yes cash basis here. I run it through my PayPal and my personal account but I keep very details invoices/remittance etc.

My husband paid for the laptop and then I paid him back in cash. I got a tax receipt as well. Is this still ok?

When I get more serious I'll definitely be getting an accountant but as I'm barely over the threshold I think this year it's probably not going to be viable.

Nope no driving or travel but I do work from home at present.

Trying to check my messages. I'm on the app though so don't know how 🙈

[glitterglitters]

Oh and yes I'm self employed with HMRC. First thing I did. Definitely liable for Class 2 and 4(?) NI and I've kept cash aside specifically for that as well.

[njfhow]

I was going to recommend you use an accountant but I guess you want to weigh up the cost vs what tax you would save - if you aren't paying any tax because your income is covered by the personal allowance of £11,000 then you wont save so much by going to an accountant! Though at least you wont have to worry you have made mistakes on the forms. You will still have to pay some national insurance on profits over £5965 so be prepared for that.

[glitterglitters]

The annoying thing is my mum (sadly deceased) was a wah accountant. She used to check all my friend's taxes for free. Could really have done with her now 😂❤