My sibling has decided to go self employed in order to get off benefits. The job requires a lot of up front expenditure and many further expenses which they have been told they can claim as business expenses for the purposes of tax. However, they seem to think that claiming expenses means they will be refunded the full amount by HMRC. I have tried several times to explain that this is not what happens. They have budgeted as though they will be getting all this money back and already made some fairly big business purchases.
When I broached the subject they became very hostile, claimed I was trying to sabotage their job (by explaining how tax and expenses work) and has now blocked all contact with me.
Was I unreasonable to give them factual information about tax? They insisted I was “lying”. Funnily enough, after a bit of googling, I can see that many people do seem to believe they get their expenses paid back in full, if self employed. Is anyone actually in self-employment and receiving reimbursement for business expenses rather than a reduction in tax?!
Was I unreasonable to explain tax to them when they didn’t ask for my advice?