1. Mileage
You want to claim a tax deduction for car journeys to customers, suppliers and business meetings. But how do you do that? It can often be advantageous to claim mileage rather than fuel, servicing, insurance and road tax.
HMRC state that you can claim:
45p for the first 10,000 business miles
And then 25p for any business miles above 10,000 per year.
For your records, you should keep a mileage log with
Date, Reason for Journey, Location, Miles travelled.
2. Capital Allowances
Capital Allowances are the mechanism to gain tax relief for equipment and tools used in your business/self-employment over more than 1 year.
Examples include Laptop, Cars and Vans
Laptop costing £2,500
Normally you would claim a writing down allowance of 18% of the cost of the asset each year.
The Annual Investment Allowance enables you to claim the total cost of the asset against your profits in the first year. The calculation of AIA limits is slightly complex for 2018-19 so get in contact to find out how much your business can claim.
The proportion of business use of the asset is relevant. So if you use your laptop for business 75% of the time, you will bring in 75% of the cost into your Capital Allowance claim.
3. Gift Aid Donations and Pension Contributions
If you have made gift aid donations or pension contributions these are worth including in your tax return.
The effect of these is to “increase” the size of your basic rate band and enable you to pay tax on income at 20% rather than 40%.
4. Working from home
HMRC accept a flat rate of £4 per week without the need to produce receipts.
Alternatively, analyse any rent/mortgage interest, light and heat, broadband. And apportion between rooms used and hours used.
5. Using Government gateway
To use the Government Gateway you need to register with your unique taxpayer reference. HMRC will then issue you with username and password.
Apply for activation code, should arrive within 10 working days.
Unfortunately, if you are registering in the last week in January you are likely to be too late. Get in touch with us and we may be able to assist you in meeting the 31st January deadline.
How we can help
- File 2018/95 tax return
- Advice on how best to run and grow your business
- Online book-keeping software
- Tax estimates, planning for the future
- Recommend you to other businesses
Disclaimer: This blog is not tax advice. You should not act or refrain from acting without detailed, personalised advice.
Written by: Mark Plane // [email protected]