Allowable expense ?
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 :)
I would be fully astonished if you couldn't.
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.
I forgot to clarify it, I had a long list that I went through with a technical advisor and I overlooked it :)
Thanks to you all above for answering my querry,
I love this forum, its a real support for me ! :)
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.
thats a really good way of helping to decide on something
Thank you :)
Although if I understand correctly, not uniforms or CPD training, which I've always considered a little unfair.
Good one Guiseppe, even I found that one about employing a family member interesting. Hmmmm, food for thought indeed!!!!!
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.
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.
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!
Wow !!! thank you all soooooooo much for taking the time to help ! Again, I love this forum :)
Regards Sandra :)
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.
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
Guiseppe I thing you mean DEstressgin, not dIstressing :) nice one!
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!
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
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.
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.
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.
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!
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
can anyone tell me do i need a receipt for tax purposes for hiring a room?
I would, or you have no proof.
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?
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.
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!
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.
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?
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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.