Complementary Therapists Association - Forums
Posted by Sandra Mary Smith, Mar 22 2011 11:36AM

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Allowable expense ?

Hi,

does anyone know for sure as to whether you can include proffessional body membership fees (am a member of ctha obviously!)as an allowable business expense for tax purposes. I was on the phone to HMRC FOR 30mins yesterday, 20 of them on hold! and it was the one thing I forgot to clarify !?
Thanks Sandra :)
Roushan Martens
Mar 22 2011 11:38AM
I would be fully astonished if you couldn't.
Deborah Flavell
Mar 22 2011 11:43AM
Nicki Lee
Mar 22 2011 11:44AM
I'm surprised that the revenue couldn't answer this easily. I've always put in the category 'accountancy, legal and other professional fees' as it is a professional fee! Of course I'm NOT an accountant, but hope this helps.
Sandra Mary Smith
Mar 22 2011 11:48AM
Nikki,
I forgot to clarify it, I had a long list that I went through with a technical advisor and I overlooked it :)
Sandra Mary Smith
Mar 22 2011 11:49AM
Thanks to you all above for answering my querry,
I love this forum, its a real support for me ! :)
Angelina Kelly
Mar 22 2011 11:49AM
Hi Sandra,

I also claim membership to professional bodies in my tax returns, they are a business expense after all and we can't practice without them. My accountant tells me that if it is solely, entirely and specifically for the practice, then it is claimable.

Angelina Kelly
Sandra Mary Smith
Mar 22 2011 11:51AM
thanks Angelina,
thats a really good way of helping to decide on something
Thank you :)
Giuseppe Tomaselli
Mar 22 2011 12:20PM
Dear Sandra,

You can claim anything which allows you to do your job.

If you work from home, you can also claim a portion of the electricity, phone bill (including mobile), internet, heating, and you can charge rent to your business. As long as the area occupied by your business is not more that 10% of your property, you do not need to tell anybody.

If you are a mobile therapist, you can claim for car expenses at 40 pence per business mile, if you use your own car. If you rent a car, you can claim the portion of the rental, plus fuel, you have used for your business. You are meant to keep a record of the business journeys with miles travelled.

Obviously, you can also claim for insurance, membership, show tickets, CThA meeting costs, treatments you require from other therapists so to maintain you fit to do your job, parking (related to your business), all equipment and disposable, including oils, balms and waxes. Accountant and accountancy costs (i.e. stationary, stamps)

If you go over your minimum tax threshold, you can also employ a member of your family, who does not have a job (i.e. a student) and pay them up to £400 per month or £4,800 per year without having to pay N.I. or PAYE and declare it only on your tax returns. They would be doing Administrative work and they go under Administration costs.

If you just started your company you can also claim for your set up costs up to 6 months before your start date.

Just be reasonable and ’keep below HMRC radar’

Regards,

Giuseppe
Neville Dalton
Mar 22 2011 12:26PM
Although if I understand correctly, not uniforms or CPD training, which I've always considered a little unfair.
Angelina Kelly
Mar 22 2011 12:31PM
Good one Guiseppe, even I found that one about employing a family member interesting. Hmmmm, food for thought indeed!!!!!

Angelina
Angelina Kelly
Mar 22 2011 12:33PM
My understanding is that uniforms are included and so is CPD training under the heading "further education" if it is directly in a discipline you already practice in.

Angelina
Giuseppe Tomaselli
Mar 22 2011 12:41PM
Uniforms are included and so further training. If you are a massage therapist, for instance, any type of new massage you learn is further training. In many cases all depend under which section you claim the expenses more that what the expense is for.
Giuseppe
Amanda Clegg
Mar 22 2011 1:08PM
my tax advisor chap was most specific in saying he expected to see receipts for clothing - uniform/work cloths and shoes, as footwear is important for jobs where you stand. Also subs to professional magazines (eg Choice Health Mag, Today's Therapist). didn't know I could claim for treatments to me tho': will put down my yoga class subs next year!
Sandra Mary Smith
Mar 22 2011 1:08PM
Wow !!! thank you all soooooooo much for taking the time to help ! Again, I love this forum :)
Regards Sandra :)
Neville Dalton
Mar 22 2011 2:25PM
Excellent. Thanks for the clarification. I attended an HMRC course last year where I was told it would be difficult to justify clothing on a claim - although as usual, he acknowledged there were grey areas. He suggested you needed to argue that the specific items were necessary (as opposed to desirable) to carry out your work.
And yes, I appreciate the clarification regarding further training. I've always had a dilemma whether learning different kinds of massage could be included.
Thanks again.
Giuseppe Tomaselli
Mar 22 2011 2:26PM
You can claim for treatment only if it is so that you can do your job. Gym membership and pub outings for distressing and relaxation are difficult to explain
Giuseppe
Amanda Clegg
Mar 22 2011 5:27PM
Guiseppe I thing you mean DEstressgin, not dIstressing :) nice one!
Nicki Lee
Mar 22 2011 5:33PM
It's my understanding that you can only claim for uniform if it can't be confused with regular clothing. In other words, I used to claim for tunics, didn't claim when I wore plain polo shirts (because they are not a uniform) but now claim for polo shirts that have my business name on them (one of the reasons for doing so!) So unless you buy your uniforms from a 'uniform shop' or can prove they aren't just street clothing you wear for work I think the revenue would take a dim view.

I also would be extremely careful about charging for receiving massage or other therapy as a business expense. I really wish this were true, however I suspect you will find that this is not allowed - otherwise most of my clients could claim this as massage helps them do their physical jobs. They are really strict on this sort of thing - a while back I heard some story (sorry, can't verify it) that someone couldn't charge for laser eye surgery even though they needed good sight for their job, because they used their sight for other things!!

I have charged for a few treatments but this is when I was doing research into studying new techniques before doing a course so felt I could justify it as it was very specific.

Very interested in the info about hiring family members for admin and will be checking on this - thanks for the tip!
Michelle Trowsdale
Mar 22 2011 6:01PM
Very interesting trail and for me especially the point raised earlier about not having to tell anyone about working from home if you occupy less than 10% of your home for business. Where is this information sourced from? I am currently mobile as I thought it was rather expensive and complicated to go down the route of working from home. Any further thoughts appreciated! Many thanks, Michelle
Giuseppe Tomaselli
Mar 22 2011 6:17PM
I was in a pub (I do not usually visit them as I prefer restaurants) last week end and I thing the correct term, looking at the condition of some people there, is DIstressing. Well done for spotting it.

Both my auditor and my accountant advised me, unofficially, to employ my daughter to reduce my tax bill.

Within reason, you can claim for treatment if they are part of your job needs. It all depends on the reason you give to them. They could be under training, if you are learning, from another therapist, new techniques for instance.

Again a uniform needs to be that, a uniform. Unfortunately, you cannot claim an Armani suit as one.

Remember that, if you are reasonable, nobody will need to investigate you. But be ready just in case.

For instance, under Administrative expenses I claim for Repairs and Renewals; Motor Expenses -fuel and oil; Motor - repairs and servicing; Motor licence; Motor insurance; Parking; Legal costs (revenue); Printing; Stationary and office supplies; Telephone; internet; Bank charges; depreciation and Amortisation; Depreciation of Fixtures and fittings; depreciation of Equipment. This is only one of the headings

As you can see, after you finish, there is very little money left.

Giuseppe
Giuseppe Tomaselli
Mar 22 2011 6:21PM
I was told about the 10% by my accountant. I tell him how much tax I want to pay and he has to come out with the solution. The rules are there but they are too many and too complicated. That is why I pay him.
Giuseppe
Joline Saunders
Mar 23 2011 11:41AM
Hi,

Been watching this thread with interest as recently registered as self employed massage therapist. Please can someone advise if I can put down my inital massage training as a business expense? I understand CPD courses are a legitimate expense but just wasn't sure about my main training.

Many thanks.

Jo
Nicki Lee
Mar 23 2011 12:48PM
Hi Jo,
You may be able to, I believe it depends on how long ago it was. You used to be able to take some expenses on your first trading year that were expended prior to that (however I set up about 13 years ago so can't remember the details now.)
I did find that the local council Enterprise Centers or Business Links or whatever it's called in your area (if they haven't been closed down yet as the gov't seems to be withdrwawing funding from everything) to be a really good source of information. HMRC helpline is very good, and will answer questions well, in my experience, although of course they are not going out of their way to point you towards savings - you would have to know the question to ask! But the one you posed here is pretty straightforward so they may be helpful.
Best of luck!
Nicki
Sandra Mary Smith
Mar 23 2011 1:40PM
Hi Joline,

Recentley self employed therapist too and have just been on the first two free tax workshops. The advice there re training was that you cannot count your original training course, but as you say further training, cpd you can. By all means though ring HMRC. Iv done that a couple of times recentley, had a list ready ! and have gone through my pre trading and post trading expenses to clarify what I can include. They were very hepful, you need to speak to a technical advisor.
Hope that helps,
Good luck Sandra
Urvashi Patel
Mar 29 2011 3:22PM
can anyone tell me do i need a receipt for tax purposes for hiring a room?
Giuseppe Tomaselli
Mar 29 2011 3:35PM
I would, or you have no proof.
Giuseppe
Urvashi Patel
Mar 29 2011 4:23PM
Thanks for the reply. Reason why i asked was because recently a client paid by card and it had to go through the shop not directly to me,and I was told that it would be given to me minus the vat.(20%) Is this right?
Giuseppe Tomaselli
Mar 29 2011 5:06PM
If the shop is registered for VAT has to charge VAT on most of the goods and services, and pay it back to HMRC.

Also, they would pay a percentage to the credit card company, usualy, between 0.5 and 3%. depend on the card type and the 'deal' the shop manages to make.

If they issue a rental receipt, they also have to pay tax on the charge.

Giuseppe
Roushan Martens
Mar 29 2011 5:08PM
That's interesting. The centre where I work, sometimes a client pays for the treatment in the shop with a card, and we get the full amount off our bill, minus the 35p charge by the card company (unless we choose to add that to the fee so that the client pays it). We do NOT get 20% VAT taken off. I can see why your place is doing this, as they have to pay VAT on everything they make, and presumably your client's payment is going under the 'income' column. However, they should be able to do their accounts to show that this money is going to practitioners, and is not part of their own income. Our place does it, so I know it's possible. You shouldn't be getting charged this - either they can't do their accounts properly, or they are pulling a fast one!
Urvashi Patel
Mar 29 2011 5:29PM
Thanks guys for your input. Yeah I know about the credit card charge but that was not the issue. I asked them to offset the charge against my rental bill and thats when i was told about the vat. Since then i pay by Cheque but no reciept is issued.
Thanks again
Giuseppe Tomaselli
Mar 29 2011 6:12PM
Yes, it does appear that they are keeping the money for their ‘trouble’. Or they may have a turnover above £72,000. or registered for VAT for any strange reason.
However, they must give you a receipt for the rental and you should have a rental agreement. The cheque payment, could be used as proof that you are paying rent but ask for a receipt anyway. If all is correct, they should not have any reason to refuse to give it to you.
Also, try and find another place to rent, just in case.
Giuseppe
Roxanne Degarie
Apr 13 2011 5:54PM
Thank you for your sharing. I am newly self-employed and just started to keep some of my receipts. Do you use excel to keep account of your expenses or something else more appropriate?
Roxy
Giuseppe Tomaselli
Apr 13 2011 6:29PM
i have used excel so that I could set it up as the HMRC forms. Therefore, I just copy the totals into the forms. There is a program called SAGE which was used for the same purpose. However, the Inland Revenue has changed the way they want the info therefore, it is not suitable any longer. Again all depend how complicated your finances are.

Regards,

giuseppe

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