What business income should I include in my tax return?
Assuming that you prepare your accounts to 5th April every year, you should include all of your business income from 6th April 2018 to 5th April 2019. Talk to us if you are unsure.
You must include:
Any sales that you invoiced your customers for during these dates.
Any sales that you completed the work for during these dates but haven’t yet invoiced for. Any other sales to customers.
Any private sales of goods (on sites such as eBay) that relate to your business. Example: if you’re a florist by trade and you sold a pot plant on eBay.
You do not include:
Any private sales of goods that don’t relate to your business.
Any interest that you’ve received from the bank, even on business bank accounts.
This will go on another section of your tax return, not in the Self Employment section.
What business expenses should I include in my tax return?
You can claim for any of the following:
Office and stationery costs
Paper
Stationery and pens
Ink cartridges
Postage – stamps and recorded delivery
Other office supplies used for business
Business travel
Bus and Train tickets
Mileage (including miles travelled)
Hosting and technology
Web applications
Broadband (the business element)
Phone bills (the business element)
Membership and subscriptions
Professional associations
Trade associations
Chamber of Commerce and FSB Memberships
Insurance
Business insurance
Home insurance (the business proportion)
Car insurance (only if you’re not claiming mileage)
Cost of sales
Materials to make your goods
Accessories to make your goods
Training costs
Training to update existing expertise only – not to acquire new skills
Bank charges
Business bank account charges
Business bank account unauthorised overdraft charges
Business bank account bounced cheque charges
Bank interest
Business bank loan interest
Business bank account interest paid
What expenses shouldn’t I claim for?
You can only claim expenses if HMRC allows you to.
Here are some common “non-allowable” expenses that you should watch out for:
Travelling expenses
You can only claim the cost of business travel, not private travel. Don’t forget to claim the cost of business journeys in your own car.
Food and drink expenses
HMRC is very strict with sole traders and partners about claiming food costs. You can only claim the cost of food and drink while you’re out and about on business, and then only in certain circumstances. Visit the HMRC website for more details.
Clothing expenses
You can only claim the expense of buying clothing if it’s for a recognisable “uniform” such as a nurse’s or fireman’s uniform, or if it’s for “protective” clothing like a builder’s site boots.
You can also claim the expense of buying clothing if you’re an entertainer such as a musician or magician and the clothing is your “costume”. Otherwise you can’t claim the cost of clothing, even if you only wear it for your business.
Don't forget your Self Assessment Tax Return has to be submitted online by January 31st 2020. If it is even one day late, there is an automatic £100 fine!
If you need help with calculating and submitted your Self Assessment Tax Return, then get in touch. We have a Self Assessment Service that starts at just £49. Email: rich@bookkeeping4u.biz
