Tax relief and expenses for self employed what can be claimed back?

C

claire1982

Guest
Hi,

I am a newly qualified bookeeper and thinking of becoming self employed whilst carrying out a part-time office/bookeeping job and furthering my training.

I wanted to know what could I claim on the following:

A car although I do need it for personal use aswell so how would this be calculated?

Fuel for travel?

Extra gas and electricity when working from home?

Buissness meetings lunch etc?
 
Not an accountant so take this with caution!

Your car, decide/calculate a milage figure and keep a track of you miles you drive for work. Then calculate the figure, include fuel, car services, car tax etc in your milage figure.

Fuel for travel, either fill the car with a specific amount of fuel that will be used for work and keep the receipts. Alternativly, if you use your car about 40% of the time for work keep about 40% of you fuel receipts as expenses!

A home office can be claimed for in expenses, again work out how much extra it is costing you, and claim this. If you get 6 bills a year (bi-monthy) you could just put the full amount of 1 as expenses, as approximate. My understading is tax man won't be too strict on this but just don't take the pi$$!!

Buisness meetings and lunch etc. keep the receipts and put them in as just that, expenses! Again i would imagine if it was all above board tax man would be ok with it but if figure for lunch meetings was very high then a question might be asked!!
 
spindizzy said:
Not an accountant so take this with caution!

Your car, decide/calculate a milage figure and keep a track of you miles you drive for work. Then calculate the figure, include fuel, car services, car tax etc in your milage figure.

Fuel for travel, either fill the car with a specific amount of fuel that will be used for work and keep the receipts. Alternativly, if you use your car about 40% of the time for work keep about 40% of you fuel receipts as expenses!

A home office can be claimed for in expenses, again work out how much extra it is costing you, and claim this. If you get 6 bills a year (bi-monthy) you could just put the full amount of 1 as expenses, as approximate. My understading is tax man won't be too strict on this but just don't take the pi$$!!

Buisness meetings and lunch etc. keep the receipts and put them in as just that, expenses! Again i would imagine if it was all above board tax man would be ok with it but if figure for lunch meetings was very high then a question might be asked!!
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Sorry this advice is misleading is almost all respects. Why do people persist in posting replies that they're unsure of? Self-employed people can not claim mileage. Claiming for both mileage and fuel costs is forbidden, no matter who you are. The idea of filling a car with fuel to be exclusively used for work purposes makes no sense. There are drawbacks and pitfalls involved in reclaiming home office expenses. Routine lunch etc costs are not allowable, unless incurred while away from normal place of work, and subject to further conditions.
 
T McGibney said:
Sorry this advice is misleading is almost all respects. Why do people persist in posting replies that they're unsure of? Self-employed people can not claim mileage. Claiming for both mileage and fuel costs is forbidden, no matter who you are. The idea of filling a car with fuel to be exclusively used for work purposes makes no sense. There are drawbacks and pitfalls involved in reclaiming home office expenses. Routine lunch etc costs are not allowable, unless incurred while away from normal place of work, and subject to further conditions.
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+1

Crazy advice from spindizzy...almost 100% wrong and dangerously misleading in places.
 
Gekko said:
+1

Crazy advice from spindizzy...almost 100% wrong and dangerously misleading in places.
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point taken but that was advise almost exatly as I was given at a "Start your own buisness" course. I also did mention that i was not an accountant!!!
 
Hi Claire,

Do you intend to be a sole-trader or a LTD company, or some other type of structure?
Pls consider the pros and cons of each.
v. briefly - a sole trader is (AFAIK) taxed on all income minus expenses. It's cheap to set up and maintain.

As a proprietary director of a LTD company, you'll only be taxed on the salary you pay yourself. Can cost quite a bit of setup, maintain, and close down.

At this stage of your adventure, I'd think that going as a sole-trader is the best option.

Please look up www.revenue.ie to see what expenses are allowable for a sole-trader.

I have a LTD company myself so there might be different rules for a sole-trader; claiming a portion of the rent/electricity for your office is allowable, as is claming the business-related portion of your motoring expenses, business meals etc. All well explained in the Revenue leaflets. The important thing is keeping everything documented.
kind regards
sean.
 
T McGibney said:
Sorry this advice is misleading is almost all respects. Why do people persist in posting replies that they're unsure of? Self-employed people can not claim mileage. Claiming for both mileage and fuel costs is forbidden, no matter who you are. The idea of filling a car with fuel to be exclusively used for work purposes makes no sense. There are drawbacks and pitfalls involved in reclaiming home office expenses. Routine lunch etc costs are not allowable, unless incurred while away from normal place of work, and subject to further conditions.
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Can you explain a bit more on self employed people cannot claim milleage? If you do a job as for example an electrician and it cost your €20 in diesel to get to/from the job, can you not deduct this as an expense?

Thanks
 
There is a difference between mileage allowance and actual expenses incurred. As an employer you are entitled to pay and offset against tax a mileage allowance (within reason) to employees who use their car for business purposes. However, as a sole trader you are only entitled to charge the actual costs relating to the use of the vehicle against your taxable income. I.e diesel/petrol - car tax etc.
 
Thanks 44brendan, thats what i thought , just the wording had me a bit confused.
 
44brendan said:
There is a difference between mileage allowance and actual expenses incurred. As an employer you are entitled to pay and offset against tax a mileage allowance (within reason) to employees who use their car for business purposes. However, as a sole trader you are only entitled to charge the actual costs relating to the use of the vehicle against your taxable income. I.e diesel/petrol - car tax etc.
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Just want to follow up on this Brendan.

My wife is a sole trader and at the end of year, the actual costs relating to the use of her car (Petrol/Diesel) are factored in. However, at no stage has Car tax or Car insurance costs ever being included against her taxable income. Is this correct?

Also at the end of each year, her accountant sends a list of books/figures he requires from the bookeeper (ie. me). One point also asks - Did you purchase new car this year?

Why does this matter to a sole trader?. My wife has just purchased a new car? How does this affect her as a sole trader?

Thanks.
 
PDCAT said:
Just want to follow up on this Brendan.

My wife is a sole trader and at the end of year, the actual costs relating to the use of her car (Petrol/Diesel) are factored in. However, at no stage has Car tax or Car insurance costs ever being included against her taxable income. Is this correct?
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Normally a proportion of car tax / insurance are taken as a business expense in the case of a sole trader who uses their vehicle in the course of the trade. If the accountant has all of the bank statements etc. he may well be taking a portion of these as an expense when they are paid by cheque / DD, unknown to your wife.

PDCAT said:
Also at the end of each year, her accountant sends a list of books/figures he requires from the bookeeper (ie. me). One point also asks - Did you purchase new car this year?

Why does this matter to a sole trader?. My wife has just purchased a new car? How does this affect her as a sole trader?

Thanks.
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Capital allowances.
 
Just wondering is there any guidelines as what % can be claimed back as expenses for gas, elec, car, bb, mobile, for a sole trader working form home??
 
There are no guidelines as such as every case is different. If you use your common sense and set your claims at a level you'd be happy to defend under hostile questioning by a Revenue audit inspector, you won't go too far wrong. In many cases it may not be worthwhile opening up your entire home expenses records to Revenue in order to claim what will ultimately be a minor tax deduction, particularly if the deduction may later be disallowed.
 
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