Hi All, I am trying to complete a tax return for a self employed artist and have fell upon a few queries which i need reassurance on, here goes:
He works from home, and carrys out all his work from home, he is renting and paying utilities etc, from what I gather you can claim £3 per week for use of home for business, but I think his case is different to the usual, so is there a % of bills that he can claim as he works from home all the time?
He received some money from his dad, about £12k, which helped pay off some debts and he will be paying his dad back eventually but hasn't paid him back yet, definitely not within the tax return he recieved it in, so does he have to declare this on the tax return, and would it go in the income section, with all his other income from his clients etc, or should he put this in a separate section???
section 4 of the tax return, adjustment for tax due, states something about averaging for farmers and artists etc, my client is a artist, what does averaging mean?????
I am very grateful if anyone replies as it will help me out so much!!!!
Not sure about the first item but item 2 is a loan and not income (basically your client has consilidated his debts for more favourable terms!!) so it should be a liability on the balance sheet and shouldn't go near the profit figure (unless there is interest, which will be a deductible expense against profit).
Averaging is something artist and farmers can do to average their profit over two years, on a rolling average basis as the nature of their business can fluctuate over more than one tax year. There are some conditions and restriction and the link take you to HMRC help sheet 234 (2008-2009) which may help
He works from home, and carrys out all his work from home, he is renting and paying utilities etc, from what I gather you can claim £3 per week for use of home for business, but I think his case is different to the usual, so is there a % of bills that he can claim as he works from home all the time?
