Tax return expense help please

[crackerjiller]

I'm panicking now as the deadline is so close. Struggling to find professional help.

I'm a self employed carer. I need to do my tax return for 6 months of work. Stupidly thought I could do it myself but I'm getting so confused over the allowable expenses. I've talked to other carers who contradict each other and I end up in a spin.

Please could you list allowable expenses I can use as a carer. I'm confused about the car expenses and mileage. Council tax. Time doing invoices. Someone said I could put a percentage of what my car is worth.

I am trying to find an accountant but obviously it's their busiest time.

You can claim 45p per mile between clients houses, if you have to buy things for work like disposable gloves, aprons etc you can claim for them, also any uniform you have to buy.
You cannot claim council tax, time for doing your accounts or anything else like that.

First question - do your expenses exceed £1,000? If not, just use the £1,000 trading allowance and forget about itemised expenses. You can't claim both - either the £1,000, or actual costs.

Do you have a record of your business mileage (excluding personal use)? You can use the HMRC rate of £0.45 / mile. If you claim for mileage, you can't also claim other car-related costs.

Time doing invoices - I don't see how that's an expense. It's just your time - there's no external cost.

You can claim costs, not time.

Mileage at 45p/mile or exact car expenses, the pence per mile is by far the easiest. If you go the pence per mile route you ignore the cost of the car, insurance, maintenance etc. as that's considered included in the 45p.

What other costs have you got? Do you provide your own uniform, PPE, or equipment?

If you are self-employed and use any part of your home as a home office, then yes, you can claim a proportion of council tax, water rates, utilities, home insurance and broadband costs as expenses. How to do that is described on the HMRC website.

Basically count the number of rooms in your home, deduct kitchen, bathroom(s), toilet(s) and you end up with a number. Say 3 bedrooms, lounge and dining room. 5 rooms altogether. If you use one room as a home office, then you can claim one fifth (ie 20%) of all your household running costs as business expenses. If it is only a corner of one room, then claim maybe only 10% instead. As long as it is reasonable, then it is allowable.

Are people referring to home office expenses? Do you do any work from home? If so you can claim a set amount as an expense depending on the hours you work from home.
Then you've got 45p per mile to and from clients, PPE, possibly things like a work phone.

This is true, but be ever so careful if you own your own home - when you come to sell you will be charged capital gains tax on the portion that’s for exclusive business use for the time you’ve claimed expenses - usually it’s not worth the expenses reduction unless you’re renting.

Does mileage start from my home ?
Some days I see 3 clients in different villages. Do I count mileage from home and then in between clients and back home?

I know some carers are saying you can claim mileage AND car expenses like tax and insurance but others say no. Someone told me if I claim for mileage then the next tax year I have to do it that way again? Confusing

I have kept a record of all miles and kept my fuel receipts.

I bought a phone for work in December 2023, it is mainly for work, I paid about £300 and pay £35 per month on contract. I have statements for this.

OP I use an app on my phone called drivers note. It costs £10 p/mth and I love it. It records all my mileage and I can just check off what’s for personal and what is work. I would start using it tomorrow if I were you.

Except my accountant advised it’s 20% x working hours at home/37.5 if it’s not in use the whole time even if only used for this purpose.

I bought a phone on contract.

I've recently bought (so not relevant for this tax return) an iPad for work use and a printer. How do I prove they are for work use only?

I've bought many Covid tests via amazon and disposable gloves and wipes, are these valid expenses? Is it the total cost?

you wouldn’t need to prove it in your tax return but when it gets checked if hmrc think it looks dodgy then you’ll be selected for a compliance check and have to justify it. If you can make a reasonable case for why you need an iPad or whatever then that’s fine.
the rule is “wholly and exclusively” required in the course of running your business.

all the Covid tests / gloves etc are all allowable and yes it’s the total cost.

re the trips from home - from memory I think it’s just between clients but I think it depends on what percentage of your work happens from home to determine whether home is also a place of work.

A lady who uses an accountant said he puts through 6% of the value of her car?

I had quotes of 300-400 pounds plus VAT from accountants for them to do my tax return. That's a lot when it's for such a small amount of work I did over 6 months. In that time I earned around £8k I had been employed before that so that needs to be taken into account, I'm over the threshold for not having to pay tax. There's also National Insurance to pay. I'm also hearing about having to pay in advance towards the next tax years bill! I have saved each month so hopefully I can afford all this.

Don't forget £60 allowance for washing your uniforms.

If you can afford it TaxScouts will do your self assessment for £169. You upload your receipts etc and can ask them questions.

The 45p per mile allowance includes a contribution towards insurance and maintenance of the vehicle.

I believe (though someone else might correct me) that only rhe milage between clients is claimable - the distance between home and your first client, and between your last client and home at the end of the day, is considered to be equivalent to anyone else's journey to and from work which no one gets to claim for.

You can claim for your phone if any personal use is very minor and incidental - I was advised if 10% or less of usage is non-work related. I don't claim for mine as I think my personal use exceeds 10%.

As a pp already said - if your expenses aren't going to exceed £1000 across the year you can save yourself this hassle as you only need toaccount for expenses if they exceed £1000. For lesser sums you can waive the expenses and just claim a £1000 allowance - it's either/or though, you can't do both.

Basically there are two ways of doing it, you can claim for the actual costs associated with the car eg. Tax, insurance etc. if you purchase a car you can also claim capital allowance which is a percentage of the cost, this is adjusted for private use. Alternatively you can claim the 45p a mile which covers all costs of the car. If I was you I’d go with the mileage claim at 45p a mile as it’s more straightforward.

im an accountant and if you can to us at this point in January wanting a tax return done there is no way we’d take you on as a client

Yes the 6% thing is probably to do with what’s called Capital Allowances - personally I wouldn’t attempt to work that out myself.

i would also just go with the mileage.

But capital allowances could come into it next year for your iPad.

Basically don’t stress, have a go, put down what you think.

Yes to the total costs of “consumables” like gloves and covid tests.

yes to 45p a mile then don’t worry about other car expenses. I would do all work related mileage from home to clients houses since your “base” is home.

yes to something for your home as an office if that’s where you do your admin, but might not be worth the hassle.

and yes to totting up your expenses and if they’re less than £1000 just opting for the £1000 “trading allowance” instead.

Have a go - HMRC are unlikely to check you unless you’re obviously taking the piss and won’t come down hard on someone that hadn’t done it before and made an honest mistake.

45p per mile is meant to cover expenses on your car - actual petrol costs are obviously significantly less than that. It is likely to be the simplest way as saves working out proportion of car use for business use, capital allowances etc. So means that covers all car related stuff. You don’t get mileage to your ‘normal’ place of work - so eg if you go to the office and then a client, you’d only get the office to client bit. But it sounds like you don’t have an office so I’d assume you can claim home to all clients.

All the things like gloves and Covid tests are things you need for work so you can claim these.

as pp mentioned am allowance for washing uniform

You can claim for costs at home if you wfh some of the time but as a pp mentioned it also means that that proportion of your house is no longer classed as your residential property so you could have to pay capital gains tax on a proportion of your sale. I’d be v wary of this, but it’s more worth claiming if you rent. But it sounds like because you go to clients it would be quite small - as you do first the proportion of the house (eg for using a room or part of a room) and secondly the proportion of working time.

Lastly, if you get it wrong you can go back and amend your return over the next 12 months and reclaim additional tax paid if needed etc - so it is worth getting it done on time to avoid fine and then if needed making amendments

At this late stage I'd just use the simplified expenses for use of home and speak to an accountant about next year.
https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

Unfortunately an accountant is going to be expensive for a tax return at the last minute, especially if your expenses aren't on any system or organised. Not meaning to be harsh that's just how it is. The accountant cost is an allowable expense though and I think finding a good one going forwards would help you. Mine explained to me things I could claim I'd missed and we chat about the different options.

But you only earned £8k from this self-employed work, is that right?
And how much other income did you have from e.g a PAYE job during the tax year Apr2023-Apr2024?
If your earnings from a separate PAYE job were over 12,570 and you don't bother with expenses and just claim the £1000 allowance then the maximum tax due is £1,400. If you can pull together receipts and documentation for expenses of say £2,000 then that reduces the tax bill to £1,200 so that's a saving of £200. The question is, is the amount of work you would have to do to "earn" that £200 really proportional to the reward?

If your non-self-employed earnings were less or your real expenses were more like £1500 then the saving is less and this stress and anxiety is even less worthwhile. If you can't document and justify as much as £1000 of expenses then 100% of this effort is wasted.

I believe (though someone else might correct me) that only rhe milage between clients is claimable - the distance between home and your first client, and between your last client and home at the end of the day, is considered to be equivalent to anyone else's journey to and from work which no one gets to claim for.
No. Commuting costs are not permitted (travel to and from a usual place of work), but the OP has no usual place of work so all the mileage is allowable, including to the first client and from the last client of the day.

I'm also hearing about having to pay in advance towards the next tax years bill!
I'm not even going to begin to correct all the misinformation the OP "has read somewhere", but yes.. you are expected to make Payments On Account for next year. But there is an option on the form to adjust this (even to zero) if you predict you'll be earning less next year.

HMRC have a lot of information sheets, webinar recordings, etc. on completing your SA return.

One tip I'll give is that submit it at least 3-4 days before you plan on paying (i.e. don't leave submitting until the last minute). If you let your return sit on the HMRC website for 48hrs you'll get an updated calculation of what you owe against your account. It's usually less than the initial amount given immediately after you submit the data - HMRC needs a day or two to run the information you've just given against the information they already hold.

You need to get a specialist to do it. You will just have to pay the fine £100? for late submission.

I'd be cautious about claiming for both an iPhone and an iPad as a carer, were they both exclusively required for your work?

You've taken a lot of information from a lot of different sources which is why you're confused.

There are some things accountants will suggest/know you can claim for, but obviously there's a cost to that which is unlikely to be worth it for your level of income.

In your shoes I would claim:
45p per mile for all business mileage, starting and ending at home
Full cost of all PPE/Covid tests etc
Full cost of phone and iPad including monthly costs if you really do only use them for work. If you also use them for other stuff then claim 50%
Any first aid training or professional body registration fees

I'd forget about the use of home / time doing invoices / any other car costs - some of this might possibly be allowable, but you need to play it safe if you are doing your own return.

You really don't - not at this level of income.