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Post Info TOPIC: Expenses - self-employed


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Expenses - self-employed
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Good morning everyone!

A few questions about expenses, if you don't mind...

I'm registered as self-employed with my home address, and will be teaching private English lessons in cafés/students' homes/offices. I presume I can claim all train/bus tickets to and from these places as expenses? If I teach in a café, I presume I can claim the cost of the coffee I drink?

Mobile phones: I have 2 phones. One is a simple phone with the number on my website, adverts etc, so I presume I can claim any top ups as expenses. I also have a smart phone for personal use, but I'll also be using that for work emails, google maps to find places when out and about etc. Can I claim that too? It'll be a SIM only deal and I'll buy a bundle every month.

Thanks in advance :)



-- Edited by Borboleta on Monday 12th of January 2015 10:38:57 AM



-- Edited by Borboleta on Monday 12th of January 2015 10:39:23 AM

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There's some good questions in there as they may not be as obvious as they seem.

Lets take each question separately.

1) Travel expenses to non permanent places of work are allowable expenses.

2) The coffee is a contentious one in that the official line would be a straight no (you drink beverages to live and / or personal enjoyment, not in order to work) however, there is no way that you would be allowed to conduct your business in the coffee shop if you did not purchase something from them. The question is, the venue is your choice so does that then annul any arguement to suggest that the purchase was a necessity.
We are using the example of a coffee but the same arguement could be extended to a pub, fast food restaurant, hotel foyer, etc.
For the reason given later (in (4)) I would actually add the price of the coffee to your fee's and pay for it personally.

3) one phone is allowable, if you have two then one of them will be a benefit and you will be taxed on it. Another option would have been to rent a number from someone like Vonage which calls all of your devices, that way you don't have to change websites and adverts on change of phone. Your current scebnario would seem to indicate that the number associated with the business is the phone that you should charge to it and possibly consider changing that phone to a PDA.

4) This is a general one. The business that you are in / going into is very much on HMRC's radar as private tutors (along with the likes of Cafe's and Ebay sellers) are renowned for underdeclaring income. I am sure that you are completely innocent of such practice but from HMRC's point of view its guilt by association and guilty until proven innocent so always be prepared for a visit and keep every invopice and receipt associated with your books squeaky clean (well done for asking the questions that you have by the way).
The argueement over the coffee in the scenario you describe has arguements to suggest both that it should be allowable and also that it should not. One approach that you could take rather than claiming and hoping is to ask HMRC for a dispensation and give your reasoning that you feel that it should be an allowable expense in your particular circumstances.
If they say no you have your reason not to claim it. If they say yes then you have no fear of a nasty surprise a couple of years down the way.

This is one of those area's where you may get differing oppinions on the site. I'm prone to being quite risk averse in my approach where other answers that you receive may be a little more flexible. what you should take away from that is that there are many things around expenses that are not quite black and white and there is often disagreement in interpretation.

Hope that helps and you are not now more confused than when I started my reply,

kind regards,

Shaun.


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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



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Hi Shaun,

Thank you so much for such a detailed and helpful reply - I'm definitely not more confused :)

I'd rather be risk averse too, and of course want to do things by the book. It's interesting to know that this area is on HMRC's radar though!

I want to keep 2 different phone numbers so I can switch my work phone off at weekends, so I'll just claim for that one.

Thanks again!

 

Edit: Meant to ask, what would be the best way to contact HMRC to ask about the coffees? I've found various helpline numbers, and I'm guessing they're quite busy at the moment anyway!



-- Edited by Borboleta on Monday 12th of January 2015 03:26:32 PM

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Hi Borboleta I used to have two phones one for business and one for personal and I found it a bit of a pain, having to carry two phones everywhere. If you are using your smartphone for emails and wayfinding, y not just keep that one. I use TTNC for my main business number which I persume is similiar to voyage but I think its great. Your calls can be transferred to your mobile or home no, and now you can even ring back using your own number (but I imagine that is costly so havnt used that yet). It takes messages for you and emails them. Very best of luck in your career. Kind regards and very best wishes Lainy



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Thanks Lainy :)
I had 2 phone when I was doing the same job in Barcelona. I know it's a bit of a pain carrying them round, but I like being able to switch the work one off at the weekend. Will investigae the other options though!

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Hi again,

Two more expenses questions...

1) Yesterday I took a train to teach a lesson. However, my husband came with me and I bought both our tickets as we have a Two Together railcard. Can I just count half of it as an expense, making a note on the receipt or something?

2) When we move house and I start travelling by train more regularly, I'll buy a season ticket. Can I claim a percentage of this? Obviously I'll be using it both for work and personal travel.

Thanks in advance :)

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Hi

On the two phone point, why not get a dual sim phone.

That way you only carry one phone but have two numbers, and can switch between the two easily, and switch one off, leaving the other on.

I know Samsung make one.

Bill



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Thanks Bill - I've seen those. At the moment I have a good and fairly new smartphone, so not looking to buy a new one. Will keep it in mind for the future though!

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Another option is to get yourself a local number and have it routed to your smartphone using an app like sipdroid.

You can get a local number for £2 + VAT from a company like Voipfone.  You could then route your number to voicemail whenever you wanted to.



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John



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Thanks John, that's useful to know. For the moment I'll stay as I am with phones - it's useful having a mobile number as some people like to text rather than call. I'm not spending much on it in any case.
Can anyone help with the season ticket question?

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