Hi
I am currently full-time employed, earning £30,000 per annum. In September this year I also started my own business as an extra source of income ... I have already informed the Inland Revenue that I’m also self-employed, and obviously my employed earnings are PAYE. I’m planning to see an accountant in the next couple of weeks to get my accounts prepared properly (when I've found one!), but want to go to one atleast with an idea of my profit & loss etc and would be grateful of any advice you can give me.
1) My first contract for my self-employed business was won in October, for £5000 - paid up front, to provide marketing & graphic design support to a new startup advertising company for 6 months. This mostly involves me sitting at home evenings and weekends in front of a computer, but also needs 2 trips to the company each month (240 mile round trip). For the first two months I used the car i share my with partner, so my first question is can I claim my mileage (e.g. 40p per mile) – I didn’t keep any petrol receipts but logged how many miles, date of trip etc.
2) In December I bought a brand new car, on Finance (Price of car £8500 less £850 part exchange = £7650; paid for by three years finance of £188 per month with optional final payment of £3000 in three years time). This was taken out in my personal name, not in my business name, and I plan to use it 45% business and 55% personal. The loan repayments come out of my individual bank account. I think I can offset the car as a capital expenditure against tax, at 50% depreciation in the first year for the 45% that I’m using for business, etc...but am I correct in thinking this? And if so, what do I use as the value of the car - £8500, £7650 or the value of the car+the interest of the loan??
3) I also use my personal mobile phone for the business, which I pay out £35/mth on a contract, again from my personal account rather than the business account...can I offset this against tax too?
4) About a year ago, I bought a second hand powerful cad workstation with the necessary software, aswell as a printer and digital camera. I knew I was going to set up my business and wanted to start getting the necessary equipment early. Can I offset this against tax even though it was bought before I actually started the business, and does it matter that it was bought second hand? If I canÂ’t, could I buy the equipment off myself for a reasonable price?
5) Finally, in October I transferred £2500 from my business account into my personal account (to pay off some credit card debts), but obviously some of the ‘business expenditure’ such as mobile phone, car loan payments etc come out of my personal account. If I can deduct the aforementioned items off the money earned, my taxable profit may be very low when I’ve done my profit & loss (say £1000 instead of the £5200 income), but I may still have £2500 for example showing in my business bank account...is this okay? Also, am I correct in thinking I don't need to submit a self-assessment this year to the HMRC?
6) One last final thing....if my business actually made a loss this year, would I be able to reduce the tax I had to pay through my employed earnings or would it have no affect on that side o fthings (IÂ’m expecting the answer is a no!)
I apologise upfront if I'm being cheeky asking for so much advice. I've already learnt a lot from all the useful advice on these forums here so would like to also express my thanks that such a site exists...a few weeks ago this was really daunting, but thanks to this site I'm starting to feel like I'm learning to get my head above water!!
Thank you all in advance for any help you can give me on all this!
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