Tag Archive | "tax return"

Remember…Remember…The 5th of October

Write this date on your calender folks…the 5th of October. Why? Because it’s the deadline for 2017/2018 Self Assessment.

That’s right. If you are planning to submit a self assessment for the first time then it MUST be done by the 5th of October 2018. No excuses.

HMRC have just sent out a press release reminding all of you first timers to get your skates on. At the time of writing, you only have 10 days to visit the official HMRC website and get signed up. The clock is ticking.

Once you do sign up then you are all set and are free to complete your tax return for the 2017/2018 tax year and then send it in by the 31st January 2019 deadline.

If this is your first time then it might all seem a bit confusing, but trust me, it really isn’t. Especially if you have a contractor accountant on your side.

That would be my advice anyway. Hire a contractor accountant…even if you are not a contractor.

Forget about those general accountants. Most of them don’t know their elbow from their ankle.

A contractor accountant, on the other hand, is the perfect choice for someone doing self assessment for the first time.

They will do most of the heavy lifting for you. Which means all you have to do is lie back and think of England…or Scotland..or Wales…or even Northern Ireland. Anywhere in the UK basically.

Not sure if you should be doing self assessment? Then you need to get yourself to the Self Assessment page on the HMRC official website. You can access that page on your home computer, laptop, tablet or smartphone. 24 hours a day, 7 days a week. So there really is no excuses for not checking.

HMRC have also prepared some high quality content to help you through the self assessment process. You can find webchats, webinars, YouTube videos and social media posts across their network. So make sure you check it all out.

Here at Contractor Accountants we know a thing or two about high quality content. Just take a look through our weekly blog posts and you will see what I mean.

If you are just beginning your self employment journey then I would suggest checking in here at Contractor Accountants on a weekly basis…even if you are not a contractor.

Sure, we specialise in blog posts for contractors, but we also welcome freelancers, small business owners, gig workers…everybody!

Even if you are not self employed, but just thinking about becoming your own boss, then reading our blog posts on a weekly basis is 10 minutes well spent if you ask me.

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Your Tax Return Excuse…Accepted!

It’s almost 1 month since the tax return deadline slammed shut, and for those who missed it then a £100 fine is on the way, no doubt.

Unless you have a valid excuse that is, although as I’ve reported about before the vast majority of excuses are firmly rejected by HMRC.

That doesn’t stop people trying though, with talk of aliens and other extra terrestrial beings interfering with hard working contractors getting their tax return in on time.

Unless HMRC actually see the spaceship in your back yard then I don’t think they are going to allow it, which means your tax return excuse will be quite rightly…rejected.

Do all excuses get rejected? Apparently not, as HMRC have just released a list of the type of excuses that are more likely to be…accepted.

For example, if you were hard at work trying to complete your online tax return just before the deadline, in the hours between 11pm and midnight (which many people were), then any kind of computer of software problems during that time could lead to HMRC looking on the brightside and deciding to give you a free pass.

You might need to prove that your computer gave out on you at the last minute, but if it really is a genuine excuse then you can probably avoid that £100 fine.

The same goes for if the HMRC website decided to have an “under construction” message during the final few hours leading up to the tax return deadline.

In other words, if it was the HMRC official site that failed you and it is no way your fault that the deadline was missed, then you can expect them to be very relaxed about the £100 fine.

What about another kind of excuse that will be accepted? You will be pleased to hear that if your property has recently been subjected to fire, floods, or theft…then guess what? You probably won’t be fined the £100.

HMRC understand that a fire will have no doubt seen your tax return go up in flames, while a flood would probably have made it unreadable.

A theft? Well, if a rogue of the night swooped in and decided to relieve you of your tax return then there really isn’t anything you can do about it. HMRC will understand this.

Another excuse that could work in your favour is whether or not the Royal Mail have got their act together. We all know how your average postie in shorts can be a bit relaxed at times, to the point where you send off a letter in January only for it to reach its destination a few weeks later.

“First Class” just doesn’t have the same meaning anymore and neither does “Second Class” either. If there are delays in the postal system that caused your paper tax return to miss the deadline then you can expect a bit of understanding from HMRC.

Do you know who else has complete and total understanding of the tax system in the UK? Contractor accountants of course, who you can hire (and fire) at will, although if you choose the contractor accountants found on this website then expect to do more hiring than firing.

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You Have a Tax Refund…NOT!

Plenty of contractors got their tax returns in by the 31st January deadline and paid with their credit card…some even got tax refunds, so they thought.

Emails have landed in thousands of inboxes over the last few weeks all claiming to be from HMRC and with the headline..”You Have a Tax Refund.”

This no doubt was a nice surprise for all of those hard working contractors out there, who would obviously like to receive a cheque in the post.

Unfortunately, these emails are not legit, and in fact, if you click on the link and then go to the website then you are asked to put in your personal details such as bank details and credit card information.

This isn’t the real HMRC website though, oh no, it is a fake website setup by those crafty criminals that operate in cyber space.

Not only that, but they have also started to send out texts as well as emails, all claiming to be from “HMRC.” It’s easy to see why so many contractors fall for these scams. They look so legitimate.

One contractor who wishes to remain nameless said that he got an email from “HMRC” promising him a tax refund. All he had to do was click on the link…but this particular contractor was having none of it.

Instead, he contacted HMRC directly through one of their direct communication channels and was met with the response he anticipated. The response? That HMRC will never, under any circumstances send out an email or text telling people they are due a tax refund.

Official correspondence usually comes through your own personal account on the HMRC website, or they may even send you a letter. That is how they do things.

Also, a spokesperson for HMRC did mention that anybody who has been scammed by this cyber criminals, well, if you let them know then they will do everything in their power to investigate the issue and try to bring these online thieves to justice.

I’ve heard the government and Police force are working very closely together on this, and in the future we should start to hear about arrests being made.

For now though, the best piece of advice I can give to any contractor to avoid becoming the next victim is to hire an accountant.

Not just any accountant…a contractor accountant, someone who specialises in controlling the tax affairs of our nations self employed freelance and contracting professionals.

You don’t even need to bother about clicking on emails from “HMRC,” all you need to do is send everything to your accountant to sort out.

If you get a tax refund then great. Your contractor accountant will arrange it with HMRC and make sure you get the cheque you owed, directly in the mail to your mail box.

Don’t delay…hire a contractor accountant today.

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Owed £400? Some Contractors Are…

Getting in your tax return by January 31st is essential, unless you want a £100 fine…but, some contractors may actually be owed £400…

That is because recent statistics show us that during the 2017-18 tax year, there is an estimated 4.7 million self employed Brits who have overpaid on tax.

Yes you read that right. Not content with giving up between 20% and 50% of their income, there are contractors out there who want to pay even more…more than they should.

Of course, they are not doing this on purpose. There are no prizes for overpaying on tax and it won’t get you into the good books of HMRC, so to speak.

The only thing that happens is you get a refund, with a short note to get your books in order and “stop sending us too much money,” no doubt.

After looking through the numbers of the amount of tax that has been overpaid by the self employed workers of our nation, experts have estimated that, on average, every person who overpaid is due around £400.

That is going to be a nice surprise to find in your morning mail. Instead of bills, bills, and more bills…it’s going to be a cheque for a change. Pay that directly into your bank account.

While there are nearly 5 million who have overpaid, there are some that have done the exact opposite…underpaid!

Guess what? These people who have deliberately or not deliberately tried to short change the HMRC are now going to be punished, to the tune of £800 million pounds sterling.

So that is quite a bit that each and every self employed person is going to pay and this includes contractors don’t forget. The HMRC accept debit card, cheque and postal order, although your credit card may be declined.

No matter if you are in the “overpaid” or “underpaid” camp, if you ask me, the number priority for you right now is to hire a contractor accountant.

This saves you from making mistakes that could get you in trouble with HMRC, and if your accountant does make a mistake, well, you can just blame them. After all, if would be their fault.

However, you don’t have to worry about your accountant making mistakes, not if you choose one of the best contractor accountants in the UK.

If you browse around this site then you will find plenty of the best, and none of the worst. It’s win-win all round really.

Even better, if you are one of the lucky contractors who is soon going to be getting a cheque for £400 in the post, then perhaps you could use that cash to hire an accountant. They soon start paying for themselves.

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HOW LONG? 26 Million Hours…That is How Long

With the tax return deadline just around the corner there is one thing we know for sure…contractors are going to be spending time “self assessing.”

How long exactly? According to a recent survey it is going to be a collective 26 million hours that contractors and the self employed in general are going to put in over the tax return season. No matter if they are filling in those returns online or offline, it definitely is a lot of time that is being spent.

The survey went on to find that 47% of contractors who have previously filled in a tax return, well, they take, on average, between 1 and 3 hours to get the form filled in and then sent off to HMRC.

A simple click of the button if they are doing it online, or, placing the form carefully into an envelope and then slapping a stamp on before putting going to the postbox if doing it the traditional way. A postie in shorts will pick it up shortly.

How about this…the survey went on to find that 29% of self employed people (which includes contractors and freelancers) have got the process of tax form “filling in” down to a smooth 1 hour or less. They don’t mess about, and are usually done in time for lunch.

However, when you consider that mistakes are becoming more common on tax returns, to the point where HMRC are regularly handing out fines and other punishments, then maybe some of these people should spend a bit longer than 1 hour making sure they do it right.

Not everyone finds filling in tax forms a piece of cake though, with 20% mentioning it takes them more than 3 hours to get it all done and a staggering 4% who say it takes them more than 15 hours.

Yes you read that right…15 hours! Some people could really do with a contractor accountant if you ask me.

Of course, keeping your books in order and storing away all of the receipts and invoices will go a long way to making sure the season of tax returns is a happy time, but, and this is a big but…if you have a professional such as a contractor accountant in your corner then they can save you a whole lot of hassle.

Not only that, but many contractors mention how their accountants also save them money…often paying for themselves, no doubt.

Back to the survey and 34% said they have trouble understanding the complicated forms provided by HMRC, while 10% complained they have to spend too much time looking up definitions of words in the paperwork.

Perhaps a new and improved form could be a good idea, one that is written in plain English and easy to understand? Maybe.

What I do know is that you will find it very simple to hire a contractor accountant right here at this site. Take a look around and see who we recommend. Only the best, that is for sure.

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“YOU LIE!” – 60% of Self Employed Under-Reporting Tax

Filling in a tax return and sending it off to HMRC is a legal obligation, just make sure you tell the whole truth and nothing but the truth.

This comes on the back of a new study that quite clearly shows that 60% of our nations self employed under-report the amount of tax they owe.

Are they doing this intentionally? In my opinion, most are not, but that doesn’t change the fact that any inspector will instantly assumed you lied on purpose. This spells one word and one word only…trouble.

That last thing you want is to be investigated by the HMRC because of some mistake on your tax return. You want to be focused on your business, and not up in the dock facing a jury of your peers.

The study is based on analysis of approximately 35,000 audits of tax returns that were chosen at random and carried out by HMRC between the years of 1999 and 2009.

Perhaps online digital tax returns are making things easier for self employed people? That could be true, and many pundits were predicting that quarterly tax returns online could make things even easier. Unfortunately, it seems that the sending in a tax return 4 times a year idea has been scrapped.

The vast majority of tax under-reporting is believed to be under £1000, although the study did mention that around 4% was over £10,000, which of course, is the kind of amount that HMRC are not going to be too pleased about.

Where are the worst self employed offenders? It appears that construction, hospitality and transport sectors have the most, with bed and breakfast owners and taxi drivers being right at the top of the list.

The professor behind the study had this to say: “Between errors and deliberate under-reporting, a significant share of self assessment tax goes unpaid.”

If you ask me, a lot of this could be avoided by hiring an accountant to take care of everything for you.

Many self employed business owners, freelancers and contractors think they are doing everything right when doing their self assessment, but are actually making unintentional mistakes that could jeopardize their business

That is why I advise every single self employed person in the UK to find yourself a good accountant. Don’t assume you are not one of the people under-reporting your tax.

You don’t know until someone trained and experienced goes over your tax form…that person is a qualified accountant, and they make it their number 1 priority to make sure you stay on the right side of HMRC.

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CHAOS EXPECTED Over New Tax Form “Error”

HMRC have come up with a new system where tax forms are already pre-filled with your data, in a bid to make the process of self assessment more simple.

It sounds like a good idea if you ask me, because as all of you contractors, freelancers, gig workers, and business owners will be all too aware, spending hours filling out tax forms is a major hassle.

However, some experts are predicting that around 10% to 20% of these pre filled forms will actually contain errors, which means innocent self employed people around the country are going to be paying too much tax.

Yet again, it is the hard working people of the UK who get taken for a ride, while the super rich billionaire playboys relax in their luxury yachts around Monte Carlo and have never even seen a tax return form. Allegedly anyway.

Many pundits are predicting this “simple assessment” that isn’t so simple will cause chaos around the country, especially when you consider that any error on the form only has 60 days to be challenged and corrected.

A lot of our nations self employed don’t have the time to be going over every sentence on their pre-filled tax return and then having to check it against their books. There are only so many hours in the week, and most of them are spent doing the things that make you money.

For this reason, I would advise every contractor, freelancer, gig worker and business owner to hire an accountant immediately. Let them take care of that side of your business so you can do what you do best.

Any decent accountant will be well versed in the art of finding mistakes on self assessment tax forms, and once found, they can challenge the mistake and get it corrected…all without you having to lift a finger. That’s what you pay them for.

Not sure where to find a good accountant? How about right here at Contractor Accountants, where you can find the details of professionals who specialise in saving you the most amount of money, legally of course, while at the same time making sure you don’t get into trouble with HMRC.

It doesn’t matter how much you are making either. Some contractors and freelancers think that just because they only bring home £30,000 a year they don’t really need an accountant and would be better off doing the books themselves.

Unfortunately, it isn’t as simple as that, and the truth of the matter is that thousands of self employed people are paying more tax than they should.

Add to the mix this new pre-filled self assessment form madness, and that is going to be thousands more that have to pay out extra tax.

Do yourself a favour and just hire an accountant. They pay for themselves anyway, so what are you waiting for? You are in the right place to get started.

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Nearly 2 Million Pensioners Forced to Fill In Tax Returns

You would think that pensioners could have the luxury of putting their feet up and relaxing once retired. It doesn’t appear to happen that way though.

A recent story by a national newspaper said that 1.7 million pensioners are being forced to fill in a self assessment tax form every year, despite the fact that many of them have not been working for years.

This is highlighted by the fact that 275,000 are over the age of 80, and for some, it’s been nearly 20 years since they last clocked in or ran their own business. Say the words “gig economy” to your average 80 year old and they probably won’t know what you are talking about. .

There are many campaigners out there who claim it is pure “madness” that these pensioners are still having to send off their tax return in the post. For some retirees, it takes hours to get it all right, and some make mistakes that results in fines and penalties.

Take the story of Anne Funnell, aged 83, as an example. She has been doing self assessment for years even though she hasn’t actually worked for an employer in a long time. Unfortunately, it seems she ticked the wrong box on a recent tax return form, which resulted in HMRC sending her a letter which demanded payment.

£5,541 to be exact, which HMRC say is for unpaid National Insurance contributions from between the years of 1978 and 1994.

According to Anne, the letter she received got straight to the point and was not exactly friendly in tone, with demands for “immediate payment” and talk of losing her state pension and benefits if she didn’t send in a cheque.

It was also mentioned that a debt collection agency would be called in if the matter was not resolved.

Who knows exactly what has gone on here, but it does highlight the fact that everybody should hire an accountant to do their tax return and get everything right, even if you are 83 years of age.

All of the 1.7 million pensioners should contact an accountant immediately if you ask me, because the last thing you want is a bill for £5,541 arriving in the post.

A good accountant would make sure the “wrong box” was not accidentally ticked and that the confusing self assessment forms were filled in correctly and on time.

Steve Webb, who is the former pensions minister agrees, and has recently gone on record to question whether or not pensioners should even be taking on the often complicated task of filling in a tax return.

“In very many cases we are talking about very small amounts of money,” he commented, “you are putting people later in life through huge amounts of hassle and stress.”

I don’t think anything is going to change soon though, and this means that nearly 2 million pensioners will have to keep filling in those tax returns.

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Contractors Spend 19 Million Hours on Their Finances

When it comes to balancing the books as a contractor you would think the logical thing to do is hire an accountant. Apparently not.

A new survey just published shows us that contractors and the self employed in general are wasting an estimated 19 million hours every month on doing their own finances. That’s roughly 2.5 million working days that are lost, which isn’t exactly ideal if you think about it.

Contractors in the UK struggle with tasks such as keeping accurate finance records, managing cash flow and completing their annual tax return for HMRC, although a third of those surveyed said they were stressed out because of it.

Not only that, but nearly half admitted they didn’t really have any confidence in their own abilities to manage the finances, so it makes you wonder why they are doing it? Perhaps they just haven’t found the right accountant yet.

15% of people in the survey commented that managing their finances was the least enjoyable part of their business, while 43% said they were frustrated and 54% admitted to regularly making mistakes.

Surprisingly, 25% mentioned they often ask family and friends for help with things like balancing the books and filling in tax returns, but in my opinion, they should just spend a bit of money and hire a contractor accountant instead. No need to bother your family and friends if you ask me.

It’s not all doom and gloom though as 34% said they are in control of their finances (probably because they’ve got a decent accountant) and 42% even went on to say they “rated themselves highly” and were “confident” about their abilities.

What I always tell contractors and anybody that is self employed…if you find it even slightly difficult to do your own books and get everything right, then start looking for an accountant right away.

Yes they do cost a bit, but the right one will actually save you money. Also, it leaves you to do what you are best at, which is running your business and becoming more profitable.

At one point it did appear the government were going to make things easier for contractors and the self employed with the whole “making tax digital”, but it now seems that has been forgotten about.

Who knows if it will come back into favour at some point, and even be introduced to the self employed? For now the best advice I can give you is to hire a contractor accountant and let them handle everything for you.

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Government Scrap Plans to Make Tax Digital

Just when you thought things couldn’t get any more crazy over there at government HQ, well this week they did, after a shock announcement.

Regular readers of this blog will be only too aware of the “Making Tax Digital” scheme that has been in the works for months now, and how when it came into play then contractors would have to do an online tax return 4 times a year instead of once.

Some contractors liked the idea, while others thought it was stupid. Personally, I can see both the pros and cons, and was at least ready to give it a chance.

Well, it seems that it probably won’t be happening after all, at least not anytime soon, as the government now appear to have lost interest in the idea.

That’s right. After spending millions of pounds and hiring some of the top financial experts in the country, and then using up thousands of hours worth of working time (that could have been spent elsewhere of course), they have now decided that making tax digital just isn’t worth it. That is what it looks like anyway.

Many pundits were expecting the making tax digital scheme to be included in a recent Bill that would have to pass through Parliament. Once accepted, it would have become law, with many people expecting it to be introduced in 2018, before being introduced to all self employed workers by 2020.

However, when the Bill was handed into reception at Parliament, much to the surprise of many politicians in the building that day, there was no mention of making tax digital. Maybe there had been a mistake? This is what some people thought, but it doesn’t look that way.

Underground sources have gone on to confirm that the government have basically given up on the idea, for now at least, and that is why we probably won’t be doing a tax return 4 times a year any time soon.

Some claim that the upcoming general election has something to do with it, while others have mentioned that it just wasn’t a very popular idea all around, both with government staff and the self employed.

I’ve been getting many contractors sending me emails over the last year or two, basically saying they were not looking forward to making tax digital and having to send in a tax return quarterly While I could see where they were coming from, my answer was always the same…”give it a chance.”

It now looks like we won’t get to give it a chance, although who knows exactly what is going to happen. The government might do yet another U-Turn, or even come out with something completely new.

The one thing that I do know is that every contractor out there should have a good accountant, no matter if you have to send in 1 or 4 tax returns a year.

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Google Pay £37m in Tax for Last Year

It’s that time of year again…the time where Google release their annual accounts, and as expected their tax bill isn’t quite what you would expect.

I’ve talked before about Google and their tax payments of course, and how many financial experts have criticised the company for maybe not paying enough.

Now, you must understand this is just all speculation and Google may very well be operating completely within UK law and doing everything above board.

It’s just that many people have unanswered questions about how a company that does billions of pounds in revenue, only pays a fraction of that in tax.

With that being said, the £37 million they have just paid to HMRC is more than they have paid in the past, with some years only seeing a small payment from Google that barely totalled a few million.

According to the most recent statement, Google did £1.03 Billion in sales last year, and this resulted in a pre-tax profit of £149 million. They have since paid £37 million in tax.

Much of their expenses came from hiring around 3000 workers in the UK last year, compared to only 600 workers the year before.

However, some experts have claimed, that in their opinion, this doesn’t actually show the full story, and it could very well be that Google have got very clever in how they do their accounts.

For example, the official accounts published in America for Google shows that the company had revenue of £6 Billion pounds in the UK last year. Many financial writers have noticed this discrepancy, with some calling for the government to take a closer look at exactly how Google runs their ship.

Maybe they just have really good contractor accountants? I really don’t know, and everything they are doing could be completely above board and on the level.

I suppose it does become more difficult to accurately look into a major company such as Google from the outside, especially when you consider they have many different brands.

For example, Google own the popular website YouTube, as well as many other sites that get millions of visitors a day. Good luck trying to work out all that. You couldn’t do it in a notebook that’s for sure.

Google had to pay some back taxes last year if you remember…£130 million worth. Even with that kind of payment there was many critics, as some financial commenters believed it was nowhere near enough, and that Google should be paying back taxes in the Billions, not the Millions.

A spokesperson for Google recently commented that “As an international business we pay the majority of our taxes in our home country, as well as all the taxes due in the UK.”

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800,000 Miss Tax Deadline (Contractors Included)

The HMRC have just released a statement saying that 800,000 self employed people missed the self assessment tax deadline this year.

That is 1 in 14 people who just couldn’t be bothered to get their tax return in on time, or perhaps they didn’t understand how? Who knows exactly, but what I do know is that it’s now easier than ever before to do your tax.

You don’t need to get any forms or send anything through the post. Everything can be done online at the HMRC website, and in the next few years they are going to be making the process even easier due to their “making tax digital” project which introduces a quarterly tax return.

Despite 800,000 people missing the tax deadline, some of whom were contractors by the way, HMRC said in their statement that things are getting better. Last year it was 8% who missed the deadline, while this year it was only 7%.

So that is 10.8 million people who did manage to get it in on time. I’m sure that many of those used a contractor accountant to get everything ready for them and even send the tax return on their behalf. It is the smart way to do things if you ask me.

Sure, hiring an accountant does cost you money upfront, but when you consider how much they save you in the long run then it’s a smart investment.

Not only that, but contractors who miss the tax deadline instantly get a 100 pound fine, which can become even more if the person still doesn’t send off their forms to HMRC.

What is interesting is that out of the 10.8 million people who did send in their tax return, 9.57 million did so online.

It just goes to show that many of our nations self employed are becoming more comfortable doing important tasks such as a tax return online, and this is one of the reasons why I think making tax digital will be a success when introduced in 2020.

Of course, it won’t be smooth sailing right from the start, and I’m sure that many people will take a while to get to grips with doing a tax return 4 times a year, but once it becomes the norm then it should make everything easier, to the point where 800,000 are not missing the tax deadline…although let’s wait to see if this happens or not.

As I’ve reported on before, there are just some contractors who find any excuse not to send in their tax returns, including excuses like the dog ate it and I don’t have the internet. Just what are some people thinking? The HMRC are having none of it though.

So the message here is clear…get your tax return in on time and don’t be one of the 800,000 who got a 100 pound fine recently.

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Expert Accountant Speaks out on Business Expenses

One of the most misunderstood aspects of working for yourself is what can be claimed as a business expense. Some people get it completely wrong.

Just like the guy who tried to put his underpants down as a business expense or the business owner who thought regular Friday night bonding sessions just had to claimed for.

Because of this confusion, a leading accountant who is an expert on all things to do with business expenses, has decided to speak out and educate the UK public, especially those self employed people who work from home.

Let’s start with household bills…can these be claimed as an expense? According to the expert, a portion of bills such as water, electricity, heating etc can be put down as an expense on your tax return, although the exact amount is not always straight forward.

In my opinion, the best way to make sure you are claiming as much of your household bills as possible, without going too far and getting into bother with HMRC, is to hire a contractor accountant who will know exactly how much you can claim.

The next expense you might be curious about is those important home office costs, such as phone, internet, laptops, and software.

Again, the answer is not always straight forward, and depends a lot on exactly what everything is used for. An example of this is your phone bill. If you make both personal and business calls then only a portion of the bill can be claimed as an expense, although if your bill is made up of 100% business calls then you should be able to put it all down on your tax return.

As always though, I advise everybody reading this to clarify your own unique situation with a contractor accountant.

Another business expense that is often misinterpreted is travel. Can you claim for those travel tickets for your business meeting, and what is the situation if you use your car for both business and personal reasons?

The expert accountant gives us some good advice in this kind of situation, basically saying that travel costs such as tickets can be claimed as long as the trip was for business purposes, while if it is a regular expense then it would be classed as commuting instead of an expense and so can’t be claimed for.

As for the subject of using your personal car for business, this is similar to household bills in that a portion can be claimed for.

If you ask me, contacting a good contractor accountant is the best way to go here because trying to work it all out on your own is time consuming.

There are many other business expenses that need to be taken into consideration when doing your tax return at the end of the year. If you are in any doubt then speak with an accountant.

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HMRC Release List of most Bizarre Expense Claims

It is now the 31st of January and the deadline is here for getting in your tax return. If you don’t do it today then the HMRC will issue you with a fine.

At the time of writing you still have a few hours left, and if you want a contractor accountant to get things done for you there might still be time. You have to hurry though.

On a lighter note, the HMRC have just released a list of some of the most bizarre, funny, outrageous, and unusual expense claims that were made by self employed people this time last year.

While there are some things that are allowed to be classed as expenses (if you are not sure then speak with an accountant), there are many other expenses that just won’t get by the HMRC, and they’ve seen it all. .

Take the person who tried to claim food for their dog on their tax return…only we are talking about a shih tzu dog here, who was listed as a “guard dog.” I don’t think HMRC are going to allow that one.

Or how about the guy who decided that putting his underpants as an essential expense just had to be done. I suppose he couldn’t work without them? Apparently he also tried to get a VAT refund on them. I don’t think that one is going to work.

Another bizarre expense claim made last year on one tax return was for “regular Friday night bonding sessions.” In other words, someone liked to go down the pub with their mates and get drunk every week, and thought it would be a good idea to put it on their expenses.

Even if they work together it’s still difficult to get that one past HMRC. The cost of travelling to a business meeting yes, but 10 pints at your local boozer…probably not.

A spokesperson for HMRC said, “year after year we receive a number of ludicrous expense claims, ranging from international holiday flights to expensive designer clothing. HMRC will only accept those claims which are genuine, such as legitimate travel expenses or the cost of tools for the job.”

So the message is clear…if you are currently filling out your tax return right now and thinking about claiming expenses for pet food, underwear, or pints of beer, then you might want to reconsider.

As always though, I recommend you hire a contractor accountant to take care of your expenses instead of trying to do it yourself.

Not only does it give you more free time to focus on your business, but as most people will tell you, hiring a contractor accountant will save you money.

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