All posts tagged expenses

The Employee’s New Clothes

 

Andrew Flynn F.C.C.A., B.SC. (Hons.)

Andrew Flynn
F.C.C.A., B.SC. (Hons.)

QUESTION: I have my own self-employment business. I like to look smart for my clients, so I buy designer clothes, which I wear at the office and sometimes at home. As I wear them for business, can I claim them as a deduction on my tax return?

 

ANSWER: No, you will not be able to claim the cost of your clothes as a business deduction. Clothes are not considered a business expense, even if worn for business activities. It makes no difference whether they are designer or retail clothes, as clothing is a need regardless of employment status and they could be worn outside of the work environment.

Tax relief can be claimed for specialist clothes. For example, protective helmets and boots would be an allowable expense for the building sector.

 

Tax relief is also available for uniforms. To be classed as a uniform, it must be clothing of a specialised nature and recognisable as a uniform, identifying the wearer as having a particular job. For example, the uniform of a nurse.

 

Where it is customary to wear a specific form of clothing, in performing the duties of a particular occupation, it may be allowable. For example, dinner jackets worn by waiters may be allowable.

 

For ordinary clothing to be classed as a uniform, a conspicuous badge or logo would need to be attached, permanently.

 

An employer can pay for clothing for an employee but that would be a benefit in kind, which would be taxable on the employee.

 
Don’t forget that the deadline for filing 2012/13 tax returns online is 31st January 2014. 1,548 tax payers submitted their tax returns on Christmas day last year with a further 4,685 on Boxing Day.

 

Merry Christmas and a Happy New Year from everyone at Nabarro Poole!

                                                                                                                                                  

Nabarro Poole does not accept any liability for actions that readers may take and recommends obtaining specific professional advice before action.

For more information, please contact us through our website: www.NabarroPoole.com

Leave a comment
by nabarropoole on Monday 18 November 2013  •  Permalink
Posted in Advice for Employees, Tax
Tagged , , , ,

Posted by nabarropoole on Monday 18 November 2013

https://nabarropoole.wordpress.com/2013/11/18/the-employees-new-clothes/

Advice Clinic: Starting A Second Business

 

Tyler Lappage ACCA

Tyler Lappage
ACCA

We were asked a good question through our free advice clinic recently. The lady who contacted us is running a successful business (self-employed) as a proof reader which makes a profit every year. She is trying to start a second business as a holistic therapist. The therapist business is just starting out and is making losses while it gets off the ground. In order to give the therapy business a boost, she does some volunteer work to help increase her profile.The questions (and answers) are:

Q. Can the losses from one business be off-set against the profits of the other business?

A. Yes, as long as the losses and profits were made in the same year. It is not possible to off-set losses in one year to a ‘different trade’ profits in an earlier or later year. If losses are carried forward or carried back, they can only be off-set against profits of the same trade.

Q. Can the expenses incurred as part of the charity work be claimed against the income from the commercial part of the business?

A. Yes (sort of). The only expenses that can be claimed on the tax return are expenses that are incurred ‘wholly and exclusively for the purpose of the trade’. There needs to be a realistic chance of gaining new business through this charity work. A case could be made that the marketing and advertising benefits of doing this work are essential to the success of the business. HMRC may have a different view, but that’s up to them. Each case is different and should be looked at on an individual basis.

If you are unsure about what expenses can be claimed or how to best utilise losses, please feel free to get in touch with us.

                                                                                                                                                  

Nabarro Poole does not accept any liability for actions that readers may take and recommends obtaining specific professional advice before action.

For more information, please contact us through our website: www.NabarroPoole.com

Leave a comment
by nabarropoole on Monday 10 June 2013  •  Permalink
Posted in Business, Q&A, Tax
Tagged , , , , , , , , , , , , , , , ,

Posted by nabarropoole on Monday 10 June 2013

https://nabarropoole.wordpress.com/2013/06/10/advice-clinic-starting-a-second-business/

HMRC laps up McLaren’s penalty for espionage

Tony Nabarro (F.C.A)

HMRC and many ordinary folks will be outraged by a tax tribunal’s decision that McLaren Racing Ltd have been allowed to claim tax relief on its governing body’s fine (£66m or £32m depending on your point of view). Formula 1 fined the team for ‘being in possession of a technical document belonging to Ferrari’, or in layman’s terms, cheating.

Of course it’s a well established fact that statutory penalties/fines are not allowable for tax purposes, but the tribunal decided that this fine was not statutory (breaking the law), but rather imposed by F1 (breaking their rules)

HMRC argue that even if the fine was incurred wholly and exclusively for the trade, the penalty was imposed for an activity that violated someone else’s civil rights and should not be considered as a legitimate business expense for tax purposes.

The tribunal decision (2 members!) disagreed with HMRC, but was not unanimous and there is time for HMRC to appeal.

                                                                                                                                                                                             

Nabarro Poole does not accept any liability for actions that readers may take and recommends obtaining specific professional advice before action.

For more information, please contact us through our website: www.NabarroPoole.com

Leave a comment
by nabarropoole on Monday 15 October 2012  •  Permalink
Posted in Accounts, News, Opinion, Regulations, Tax
Tagged , , , ,

Posted by nabarropoole on Monday 15 October 2012

https://nabarropoole.wordpress.com/2012/10/15/tax-allowable-expenses-a-can-of-worms/

Tax-free homeworking allowance increased this year by 33% (yippee!)…

Lee Moss A.C.C.A., B.A. (Hons.)

… to £4 per week (oh, is that all!).

Since 6th April employers have been able to pay directors and employees £4 per week without any PAYE on NI implications. Unfortunately the Taxman rarely accepts that there is justification for anything higher.

The solution, however, is to draw up an agreement to charge your company rent in return for using your home as a business. The rent should match the corresponding household expenses so that there is no profit element that can be taxed.

                                                                                                                                                                                               

Nabarro Poole does not accept any liability for actions that readers may take and recommends obtaining specific professional advice before action.

For more information, please contact us through our website: www.NabarroPoole.com

Leave a comment
by nabarropoole on Wednesday 3 October 2012  •  Permalink
Posted in Business, Payroll, Tax
Tagged , , , , , , , ,

Posted by nabarropoole on Wednesday 3 October 2012

https://nabarropoole.wordpress.com/2012/10/03/tax-free-homeworking-allowance-increased-this-year-by-33-yippee/