westgate started this topic @ 12:54 on 17/11/2005
Hello
I would appreciate advice as to what is possible.
I am now Self Employed, I am building a Graphic Design business after working in the industry for more than 10 years.
I began in Jan 2004, seeking Freelance design projects with established design companies
To enable this in January 2004 I invested in a Computer and the relevant computer packages at a total cost of £2,400 which was essential for three reasons.
1) To obtain work, via internet connection from home.
2) To enable the presention and organisation of10 years of design experience
In the form of a digital portfolio of Graphic Design experience.
3) To be able to create work commissioned by companies
4) To update my skills with the latest computer programmes.
As part of my transition from full-time employment to Self Employment I received Job seekers allowance from Jan 04 to May 04. (I was actively seeking all employment opportunities at this point full time, part time and freelance)
I decided in May 04 that the Job seekers allowance was of little support and from May onwards I received no Job seeking allowance.
My first invoice for Freelance Design work as a Self Employed person was dated October 04.
For the year ending April 05 my total earnings are minimal and I am trying to recoup as much tax via my expenses as possible. The investment in the Computer and programmes of £2,400 in Jan 2004 I believe could all be tax deductable? if it was a Self Employed business expense.
My issue is that I am concerned, that the Inland revenue may have a different view to this due to receiving job seekers allowance to the period of May and therefore not officially being Self Employed.
Can anyone offer a solution or opinion here to help??
Thanks
RE: Self Employed Tax Help
michaelassociates | 17/11/2005 01:10 PM
I know that you can offset a percentage (captial allowance) of your business assets at the end of the year, but in your situation im not sure. Have you contacted the I.R.?
They are incredibly helpful.
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RE: Self Employed Tax Help
csadmin | 17/11/2005 02:00 PM
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RE: Self Employed Tax Help
James Smith | 17/11/2005 03:11 PM
Westgate,
The £2,400 would be deductible to an extent. You should be able to claim 'capital allowances' on this cost if it is a 100% business asset in the 2004/5 tax year, even though the purchase was back in 2003/4. The full £2400 wont however be deductible in one single year.
It is rather complex to explain how to express this on your self assessment return, so can only suggest that you do seek some advice.
Your local tax office may help , although do remember it is their job to collect taxes and not reduce them. If you engage an accountant they should spend a lot longer with you trying to find all the tax deductions that are available to you, although you will of course pay for this service.
It is worth noting that your benefits are generally counted towards your earnings for tax purposes.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
RE: Self Employed Tax Help
westgate | 22/11/2005 11:24 PM
Thanks for all the advice offered I am in the process of checking the details out and if I have any additional questions, I will revise my post.
Thanks