Tradesmen and some creative industries sometimes have difficulties deciding upon the legitimate claims they can make for buying tools for their trade. As more construction related jobs have a digital element to their tools, this is getting even more complicated for the self-employed person to keep abreast of in terms of what is acceptable to submit in which section of your self-assessment as a business cost.
Can I claim?
If you require specific tools for business purposes you are allowed to claim; if you use equipment to carry out your business, it’s reasonable costs against your income tax. Of course, as is always the case, any private use must be calculated and excluded from the total yearly costs. Work out when you might use your tools for domestic or recreational purposes.
To down tools with your calculator, you can now just enter any tools or apparel expenditure in the ‘Self-Employed expenses’ section of SimpleTax for “Computer and Office Equipment - Other Equipment”.
Is it rare for you to ‘bring your work home’, or are you developing your residential property in your ‘spare’ time, as well as a tradesman? Do you use your arts materials to make birthday presents for your friends and family? If so, you need to look at the price of the tool and apportion a percentage of the cost between professional and personal use. Only submit the cost to your business in your tax return. Being up-front about joint usage will circumvent undue scrutiny from H.M.R.C.
By way of example, let’s assume you are a photographer and have spent a total of £2,000 in equipment during the accounting year. If this is solely used for business, you can claim the total amount as a business expense. If you use the cameras and other components in your personal time you must only declare the business fraction of the total amount. Nobody is expected to keep an itemised diary of course, but specific acknowledgement of personal use will no doubt be viewed favourably by H.M.R.C. officials.
Should you put pre-used items in for business use, or buy second-hand office items then you need to assess their market value at the time they entered the business accounts.
So if you are a hobbyist as much as a professional, using your equipment for both parts of your life, SimpleTax saves you all the time spent on ‘private usage’ calculations! Declare the total amount paid for your equipment and the personal use percentage as reasonably as can be expected and all calculations will then be done automatically for you on our system.
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