Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Clive McDonald on April 05, 2008, 11:41:55 pm
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Hi fellow window cleaners,
I've heard a lot about this site and how very helpfull you all are. I've just finished my first tax year in window cleaning and was wondering if you could help me.
I'm going to use the actual figures but rounded.
Used Van £8340
Equipment £4500
Consumables £365
Computer £690
Advertising £675
Workwear £255
Public Liability £138
Stationary £160
Motoring £1585
Use of home £???
Telephone £???
Income £18,000
If you could give me some pointers on the above figures, such as what percentages i can claim and the best way of doing things that would be great.Thanking you in anticipation lads.
Cheers
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get a accontant, much easier ;)
in the end they save you money, things that you may not have claimed for
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An accountant will save you more money than they charge and you will be safe in the knowledge that your accounts have been done right
Dean
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An accountant will save you more money than they charge and you will be safe in the knowledge that your accounts have been done right
Dean
And the tax man prefers it, it makes it easier for him so he's less likely to come bothering you;)
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An accountant will save you more money than they charge and you will be safe in the knowledge that your accounts have been done right
Dean
totally agree with the above, piece of mind
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An accountant will save you more money than they charge and you will be safe in the knowledge that your accounts have been done right
Dean
Incorrect...... my prat of an accountant(no longer my accountant) last year filled in my accounts on the previous years tax form :o
What a nightmare trying to get the tax office to sort things out , and being charged interest (which couldn't be claimed back) on the amount (supposedly) owed and of course it's my problem not the accountant ::)
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thats not true of all accountants now is it
you had a bad expience
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An accountant costs money But you are responsible to the tax man for any mistakes an accountant makes with your Tax return.
If you have an accountant you could still be liable to a tax investigation just as much as the chap who does his own accountants. A computer decides who gets investigated and who does not. The local tax office are told whom to investigate by the computer which is programed to look for certain Anomalies on your tax return, IE your income falls lower then the previous year.
Telephone : Claim 50% of your line rental and phone charges
Mobilephone 50% of phone contract or vouchers if pay as you go.
50% for cost of phone. The tax man will accept this as 50% buisness use and 50% personall.
Home: £250 to £300 a year. The Taxman will allow you £5.00 a week if you have a room set aside as an office. If your accountant is claiming more then that and you get investigated they will fine you and charge you intrest on the tax that you should of paid. They then times that figure by 5 as they will apply it to five years of your tax returns without ever looking into any extra years.
Your van you are allowed to claim 40% depreceation in the first year and then 25% a year there after.
Van Insurance road tax and dieseal you can claim 100%.
If you have a car you can put that against your tax as well but you have to allow a percentage for personal use.
If its new equipment you can claim 40% again in the first year. But as you have only earned 18k you are better claiming 25% for the first year as it will allow you to claim more against your tax in the following year.
I claim £200 a year Laundery costs. Your dont need a recepit but work clothes and cloths need to be cleaned.The tax man will accept it.
Work clothes are tricky to claim for. A pair of trainers or undies No chance as these can be used for personal use. Gloves, Waterproof jacket and trousers, Waterproof boots, Waterproof hat and T shirts and fleeces with your work logo stiched or printed on them you can claim for.
You need a recepit for everything Other then home and laundery and say £100 for staionery Items like stamps and envelopes.
Regards Neil
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An accountant will save you more money than they charge and you will be safe in the knowledge that your accounts have been done right
Dean
Incorrect...... my prat of an accountant(no longer my accountant) last year filled in my accounts on the previous years tax form :o
What a nightmare trying to get the tax office to sort things out , and being charged interest (which couldn't be claimed back) on the amount (supposedly) owed and of course it's my problem not the accountant ::)
Also incorrect....like any service provider he has a duty of care - he charges for his services so he has to accept responsibility. Take him to the small claims court to get compensation for your out-of pocket expenses and damages for his professional incompetence.
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Thanks Neil100 absolutley storming information and very much appreciated. Later today I will fill my form in online.
I was told this forum was good and if you get the right poster to reply i'd be surprised by just how good the standard is.
Thank you
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you may have thought out replies werent all that helpful, but having a accountant is peace of mind, its simple, write your earnign down, give all your receipts in. easy simple and they will save you money
i only took my accountant on last year, he was taking things into consideration i didnt even know of
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An accountant costs money But you are responsible to the tax man for any mistakes an accountant makes with your Tax return.
If you have an accountant you could still be liable to a tax investigation just as much as the chap who does his own accountants. A computer decides who gets investigated and who does not. The local tax office are told whom to investigate by the computer which is programed to look for certain Anomalies on your tax return, IE your income falls lower then the previous year.
Telephone : Claim 50% of your line rental and phone charges
Mobilephone 50% of phone contract or vouchers if pay as you go.
50% for cost of phone. The tax man will accept this as 50% buisness use and 50% personall.
Home: £250 to £300 a year. The Taxman will allow you £5.00 a week if you have a room set aside as an office. If your accountant is claiming more then that and you get investigated they will fine you and charge you intrest on the tax that you should of paid. They then times that figure by 5 as they will apply it to five years of your tax returns without ever looking into any extra years.
Your van you are allowed to claim 40% depreceation in the first year and then 25% a year there after.
Van Insurance road tax and dieseal you can claim 100%.
If you have a car you can put that against your tax as well but you have to allow a percentage for personal use.
If its new equipment you can claim 40% again in the first year. But as you have only earned 18k you are better claiming 25% for the first year as it will allow you to claim more against your tax in the following year.
I claim £200 a year Laundery costs. Your dont need a recepit but work clothes and cloths need to be cleaned.The tax man will accept it.
Work clothes are tricky to claim for. A pair of trainers or undies No chance as these can be used for personal use. Gloves, Waterproof jacket and trousers, Waterproof boots, Waterproof hat and T shirts and fleeces with your work logo stiched or printed on them you can claim for.
You need a recepit for everything Other then home and laundery and say £100 for staionery Items like stamps and envelopes.
Regards Neil
Gopod info but I would like to add a couple of bits.
My van is my only vehicle. I do not offset 100% of it against tax because clearly there will be a need for some private use. If you have a car too then no problem.
Also, my accountant told me that the percentages are changing on many capital allowances. Can't recall the details though.
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Clothing is a dodgy area, as you have to wear clothes wether or not you work.
Contract phones is also another dodgy area , especially where the phone itself was included in the contract.
Both these areas need investigating before you claim.
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thats not true of all accountants now is it
you had a bad expience
Who said anything about all accountants ::)
Aspects said
An accountant will save you more money than they charge and you will be safe in the knowledge that your accounts have been done right
I replied that mine did not :(
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Also incorrect....like any service provider he has a duty of care - he charges for his services so he has to accept responsibility. Take him to the small claims court to get compensation for your out-of pocket expenses and damages for his professional incompetence.
Not what I've been told Ian ???
what neil100 says is what I've been led to believe
But you are responsible to the tax man for any mistakes an accountant makes with your Tax return.
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Also incorrect....like any service provider he has a duty of care - he charges for his services so he has to accept responsibility. Take him to the small claims court to get compensation for your out-of pocket expenses and damages for his professional incompetence.
Not what I've been told Ian ???
what neil100 says is what I've been led to believe
But you are responsible to the tax man for any mistakes an accountant makes with your Tax return.
Surely both statements can be correct though.
1) You are responsible to the taxman for any goofs your accountant makes.
2) You can sue your accountant (as you can any other professional) if he screws up and costs you.
If the accountant has any sense, he/she will have an insurance policy to cover him/her against being sued by a client though.
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An accountant costs money But you are responsible to the tax man for any mistakes an accountant makes with your Tax return.
If you have an accountant you could still be liable to a tax investigation just as much as the chap who does his own accountants. A computer decides who gets investigated and who does not. The local tax office are told whom to investigate by the computer which is programed to look for certain Anomalies on your tax return, IE your income falls lower then the previous year.
Telephone : Claim 50% of your line rental and phone charges
Mobilephone 50% of phone contract or vouchers if pay as you go.
50% for cost of phone. The tax man will accept this as 50% buisness use and 50% personall.
Home: £250 to £300 a year. The Taxman will allow you £5.00 a week if you have a room set aside as an office. If your accountant is claiming more then that and you get investigated they will fine you and charge you intrest on the tax that you should of paid. They then times that figure by 5 as they will apply it to five years of your tax returns without ever looking into any extra years.
Your van you are allowed to claim 40% depreceation in the first year and then 25% a year there after.
Van Insurance road tax and dieseal you can claim 100%.
If you have a car you can put that against your tax as well but you have to allow a percentage for personal use.
If its new equipment you can claim 40% again in the first year. But as you have only earned 18k you are better claiming 25% for the first year as it will allow you to claim more against your tax in the following year.
I claim £200 a year Laundery costs. Your dont need a recepit but work clothes and cloths need to be cleaned.The tax man will accept it.
Work clothes are tricky to claim for. A pair of trainers or undies No chance as these can be used for personal use. Gloves, Waterproof jacket and trousers, Waterproof boots, Waterproof hat and T shirts and fleeces with your work logo stiched or printed on them you can claim for.
You need a recepit for everything Other then home and laundery and say £100 for staionery Items like stamps and envelopes.
Regards Neil
everything neil said is right BUT it is 50% on vans and new equip in first year then 25% there after,next year you can claim 100% of that back in first year (right nwh ;D)
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An accountant costs money But you are responsible to the tax man for any mistakes an accountant makes with your Tax return.
If you have an accountant you could still be liable to a tax investigation just as much as the chap who does his own accountants. A computer decides who gets investigated and who does not. The local tax office are told whom to investigate by the computer which is programed to look for certain Anomalies on your tax return, IE your income falls lower then the previous year.
Telephone : Claim 50% of your line rental and phone charges
Mobilephone 50% of phone contract or vouchers if pay as you go.
50% for cost of phone. The tax man will accept this as 50% buisness use and 50% personall.
Home: £250 to £300 a year. The Taxman will allow you £5.00 a week if you have a room set aside as an office. If your accountant is claiming more then that and you get investigated they will fine you and charge you intrest on the tax that you should of paid. They then times that figure by 5 as they will apply it to five years of your tax returns without ever looking into any extra years.
Your van you are allowed to claim 40% depreceation in the first year and then 25% a year there after.
Van Insurance road tax and dieseal you can claim 100%.
If you have a car you can put that against your tax as well but you have to allow a percentage for personal use.
If its new equipment you can claim 40% again in the first year. But as you have only earned 18k you are better claiming 25% for the first year as it will allow you to claim more against your tax in the following year.
I claim £200 a year Laundery costs. Your dont need a recepit but work clothes and cloths need to be cleaned.The tax man will accept it.
Work clothes are tricky to claim for. A pair of trainers or undies No chance as these can be used for personal use. Gloves, Waterproof jacket and trousers, Waterproof boots, Waterproof hat and T shirts and fleeces with your work logo stiched or printed on them you can claim for.
You need a recepit for everything Other then home and laundery and say £100 for staionery Items like stamps and envelopes.
Regards Neil
Pretty much spot on, very sensible post.
Tony
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What I wondered is would you all be interested in seeing it all worked through on the figures I have given?
Before you fill the boxes in on the tax return such as expense's and capital allowances and motoring these have to be figured by prior or seperate calculation, and this is what I am talking about.
Some like Neil100 already know(I'm using his info), but maybe others don't and that's why they don't have the confidence to do their own returns. If anyone thinks they spot an error they can say. If anyone thinks, I could do that for myself too, then that's a good thing surely.
I haven't done it yet but if you want me to I will put it up. There isn't any personal information there that can get me into trouble.
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Don't claim use of home if you are on a mortgage, otherwise the taxman will see it as an asset and when you go to sell your house they will claim a percentage.
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Thanks for the good advice.
I was mistaken, I can't do what i said, show a worksheet,because the online tax form does it all for you including calculating the percentages. All that is needed are the figures.
That's that sorted for another year.
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Funny how all accountants don't give the same advice ;) Bear in mind I have no employees. Mine says I can claim 100% of mobile phone costs (something Blair pushed), nothing for landline rental or costs, £6 per week for use of house as office.
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Don't claim use of home if you are on a mortgage, otherwise the taxman will see it as an asset and when you go to sell your house they will claim a percentage.
didnt know that :( whats the percentage ???
Funny how all accountants don't give the same advice ;) Bear in mind I have no employees. Mine says I can claim 100% of mobile phone costs (something Blair pushed), nothing for landline rental or costs, £6 per week for use of house as office.
different opinions on the phones,anyone know for sure
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You can claim use of home usually £5.00 a week.
It will NOT affect anything on your house sale etc
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You can claim use of home usually £5.00 a week.
It will NOT affect anything on your house sale etc
My understanding of this (and I could well be wrong) is that if you own your own home and claim a part of it as being put aside for running your business, then that part of your house could be subject to capital gains tax when you sell. However, I think there is a separate extra allowance for CGT so it is unlikely that the amount claimed would exceed it anyway. However, it is perfectly OK to offset the running costs (as opposed to capital amounts) of that part of your home - heating, lighting, small, non-capital maintenance/repairs. I even bought some office furntiure several years back and offset that too. If you could reasonably justify it to the taxman in an investigation situation, it's unlikely that you would be penalised by them. They may strike out some of your claim though as the rules seem to be more complex by the year and can be hard to keep up with.
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Hi fellow window cleaners,
I've heard a lot about this site and how very helpfull you all are. I've just finished my first tax year in window cleaning and was wondering if you could help me.
I'm going to use the actual figures but rounded.
Used Van £8340
Equipment £4500
Consumables £365
Computer £690
Advertising £675
Workwear £255
Public Liability £138
Stationary £160
Motoring £1585
Use of home £???
Telephone £???
Income £18,000
If you could give me some pointers on the above figures, such as what percentages i can claim and the best way of doing things that would be great.Thanking you in anticipation lads.
Cheers
ask your local tax office to help, they are happy to and free. plus no probs if called in. 8)
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[quote author=john tomkins link=topic=53103.msg447080#msg447080
Incorrect...... my prat of an accountant(no longer my accountant) last year filled in my accounts on the previous years tax form :o
What a nightmare trying to get the tax office to sort things out , and being charged interest (which couldn't be claimed back) on the amount (supposedly) owed and of course it's my problem not the accountant ::)
Ok so he made a mistake,but only a "paperwork" mistake.Presumably you have paid the correct amount owing for the "previous year" and the correct amount owing for last year" so if this is the case you won't be charged interest as there is 0.00 outstanding. Everyone makes mistakes at sometime and we have always found the IR helpful if we have an issue and remember even if it takes a long time to sort out IF they end up owing you, they will pay you interest on it too!
An accountant does has a duty of care to all clients and therefore is accountable for work done for you, but at the end of the day it is you who signs the return as correct. We use an accountant, but we make sure we understand everyting he does for us and if we have any queries we get him to explain before we sign anything.
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First of all you cannot round off the figures, the taxman won't like it, if you get a simple tax inspection and the taxman notices that the figure are not correct he will then do a complete tax investigation, which is very costly
Claiming for an office in the home, what the tax office allow is if you work from home and you don't use a separate room for it, then you can only claim £2.00 per week. ( this figure can change from office to office, this figure is what Birmingham taxman allows, so they said anyway)
If you use a spare bedroom them firstly there must be no bedroom furniture in it, this also applies to storing your clothes and bedding.
You cannot claim any mortgage or rent allowance unless you have purchased this property for the business.
You can only claim a percentage of the Council Tax - Electric and Gas you use, if you are on a water meter then you have to take off you personal use and work out your business use, if you are trad then this won't apply.
The percentage you can claim is worked out by you counting how many rooms there are in you home ( you cannot count the kitchen bathroom or hall/corridor - cloakroom or garage) you then divide this room or rooms that you are using for your business only to work out the percentage.
For example you live in a 3 bedroom home with 1 living-room and 1 dining room, you use one of the bedrooms as an office, you have 5 room in your home you use 1 for the business, so the percentage you can claim is 1/5 or 20%.
Telephones, if you use the telephone for personal and business use then you have to work out what the percentage of use for both is.
If you only use the phone for business use then you can claim all 100%.
You have claimed for a computer, you need to show that this is only used for the business, so if you have a office and the computer is in the living room then the taxman will assume that it is used both for business and pleasure.
Vehicle's
If you have a van then you don't normally have to declare a personal usage, unless its excessive.
There are 2 different way to claim for vehicles, one is actual vechicle running costs or mileage.
Mileage is worked out on 40p for every mile that you use up to 4000 miles then it drops down to 25p.
Vehicle costs are all the normal running costs, but excluding the vechicle purchase price, which is classed as a "writing down allowance".
Once you go one way or the other then you have you stay on that rate until you replace the vechicle, you cannot change every tax year.
Writing down allowances
If the item costs more than £200 then you can claim 50% in the first year the 25% per year until you recover the total cost, if you sell the item later then this money must be declared as a capital allowance.
If you buy a pole that costs £1000 and it breaks- get lost or is stolen, then you can claim the total cost in that tax year.
Income
The taxman is going to want to see where you income comes from, kept a list of all your customers that you have cleaned for in that week, including the ones who have not paid yet, if they don't pay for any reason then you can claim this back as a debt that is written off.
Lastly on the figures that you have shown then you won't be liable for any tax to pay unless you have a second income that has pushed you passed your personal allowance.
But for those that have made a profit that they have to pay tax on, then in 6 months time the taxman is going to want you to pay 50% of this tax figure up front as well as the tax due for that year.
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can someone clear this up for me please, i made my wfp system last year and all the seperate parts were ordered as individual items not as a complete system, so can i claim for the full amount or 25% per year. i think it would be the later
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Steven
If you brought the system in bits and pieces from several suppliers, then you can claim 100% if the separate parts are under £200 each, if one or other part is over £200 then you have to use the "writing it down allowance" for that part only.
If you brought several items from the same supplier at the same time and they issued separate receipts then the taxman would expect you to add these together.
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thanks williamx is what i thought,
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The most important thing that you need to consider when filling out your tax return, is to get your figures right and also to be able to prove what you are claiming for.
The taxman is not wanting to see any of these figure when you file them, but every year their computer selects hundreds of thousand of workers for a check up.
For most of these people all is required is they send in a sample of their records, normally 1 year accounts, but for some they are selected for a complete warts and all inspection.
This now involves everything that you have done for the last 6 years.
This is very time consuming and can be very expensive if your records are not in order. For example if you don't kept you bank statements, the taxman will want to see copies of them, the bank is not going to provide them free of charge, they will charge you anything up to £10 or more per statement.
If you are missing a receipt for something that you have claimed for then they will deduct that from your tax return, you will now have filed an incorrect tax return which now incurs a fine plus interest.
The taxman know that we all make mistakes, and the fine reflects that, but if the taxman thinks that you have deliberately fiddled your tax return then they throw everything at you, including them assessing how much you have earned, this is normally more than you have.
I knew a tax inspector once, and he said that, they know that nearly everyone fiddles their return to some degree, but when they get greedy they soon get caught.
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interesting read this thread.
this is the first year that i have decided to do my own self assesment, wont be easy but ill have ago, my accountant i had wasn`t brilliant, never saved me any money, he was always saying what is this receipt for and that receipt, and basically i paid him to fill in my self assesment form.
some one has said the tax office will help you if you go in, is this true? i dont mind spending half a day with them if they are going to fill in my tax return form.
also some one has said about personal allowance taken into account if you have a second income, i do, i earnt £8000 out of the fire service so how does this effect my allowance bearing in mind this earning is PAYE.
all my books are done and ready, just waiting for the forms,
Haydn
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interesting read this thread.
this is the first year that i have decided to do my own self assesment, wont be easy but ill have ago, my accountant i had wasn`t brilliant, never saved me any money, he was always saying what is this receipt for and that receipt, and basically i paid him to fill in my self assesment form.
some one has said the tax office will help you if you go in, is this true? i dont mind spending half a day with them if they are going to fill in my tax return form.
also some one has said about personal allowance taken into account if you have a second income, i do, i earnt £8000 out of the fire service so how does this effect my allowance bearing in mind this earning is PAYE.
all my books are done and ready, just waiting for the forms,
Haydn
I assume that the fire service money uses up your personal allowance of about 5 grand meaning that you probably pay some tax and NI on your fire money. Assuming the tax is a straight 22% (which it isn't exactly), then you would be paying about £600 a year tax via your fireman payslips plus a bit of NI.
THIS MEANS THAT ALL YOUR WINDOW CLEANING PROFIT IS LIABLE FOR TAXATION as you have already used up your personal allowance.
Of course, you may do this the other way round. It is possible to use your personal allowance on your window cleaning business profits. If those profits exceed ytoue personal allowance then your fire income should be taxed at basic rate (code BR) - i.e. no allowances. I believe that the rule of thumb is that the allowance should be used against your main income. I do this frequently. Sometimes, for the Winter months, I get a little out of hours cleaning job on the PAYE for a bit of extra money. The money for these jobs is fully taxed. I prefer it that way because it means a bit of my bill is paid come payment time.
N.B. I cannot vouch for all of the above. I'm only repeating what I've been told by various soures - including my accountant. However, the IR have always been fine with this arrangement. Presumably if my main income was on the PAYE job(s) they would want that to be called my main incxome and all the window cleaning profits would be taxed. Either way, it all ends up with the same numbers - just a slightly different way of arriving at them.
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interesting read this thread.
this is the first year that i have decided to do my own self assesment, wont be easy but ill have ago, my accountant i had wasn`t brilliant, never saved me any money, he was always saying what is this receipt for and that receipt, and basically i paid him to fill in my self assesment form.
some one has said the tax office will help you if you go in, is this true? i dont mind spending half a day with them if they are going to fill in my tax return form.
also some one has said about personal allowance taken into account if you have a second income, i do, i earnt £8000 out of the fire service so how does this effect my allowance bearing in mind this earning is PAYE.
all my books are done and ready, just waiting for the forms,
Haydn
Look at your payslip from the fire brigade if the tax code says "BR" this means you are being taxed at the basic rate and your personal allowance will not have been included. If your tax code is something else you need to look into it to find out weather your personal allowance is used on for your self employment or employment.
My personal allowance has always been on my self employment but i got a letter changing my firebrigade tax code and now my fire brigade tax takes into account my personal allowance which i don't like for obvious reasons.
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The taxman do courses on all the different types of tax that you will come across in running your business, these are broken down into 1/2 days courses so has to not get to complicated.
The taxman also have a helpline number 0845 302 1437 and they are able to give the right information that you need to complete your tax return correctly.
A good accountant will save you money because he will know what and at what level you can save money, a lazy accountant won't want the extra work. Ask fellow tradesmen who they use and would recommend.
The taxman does not always point out the tax saving benefits that are available.
For example when I went on one of their courses they said that the taxman would like me have a have a sighed receipt from every customer on what I have charged them, this I said would not happen as it is impractible for me to gather this information easily, there are some customers who I still haven't seen yet.
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i
also some one has said about personal allowance taken into account if you have a second income, i do, i earnt £8000 out of the fire service so how does this effect my allowance bearing in mind this earning is PAYE.
all my books are done and ready, just waiting for the forms,
Haydn
You will also have to pay class 4 national insurance as well, which at the moment is 8% on all profits betwenn £5035 and £33540 then 1% above this figure.
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Providing you've got the figures the online tax form does all the calculations including the percentages for you and explains it quite well. You can abandon it and go back to it at any time. How it worked for me is;
I had to enter a total business income.
Then it worked out on a seperate work sheet total allowable expenses
Then on a seperate work sheet capitol allowances
then balancing charges which was nothing for me.
This arrived at an adusted profit or loss.
In the allowable expenses there was a space for motoring, insurance (public liability), and together telephone ,stationary and office. There were bit's i didn't need like fees for proffesional services.
Then it said other allowable expenses which I took to mean the sum of consumables,advertising,workwear, and laundry.
It worked out the profit and the tax payable, which was a fair bit.
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very good thread. i think i'll be changing my so called accountant. he never told me about half of this. ive been throwing pay as you go recepts away all year. not to mention other stuff.
i'm acturly quite angry now. i only took my 1st years book in to him last tuesday. he had already occoured me a £100 fine for late regerstration of self assesment. >:( >:( >:( >:(