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#1 Saturday 12th January 2013 13:28:00

PAULUKWEB
Member
Registered: Tuesday 24th January 2012
Posts: 5

Tax Return travel between lessons and home

Hello feel like a criminal trying to fill in this tax return.
Is travel between lessons and home allowed with regards fuel etc as a business expense
it is quite vague on HMRC.
Thanks

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Saturday 12th January 2013 13:28:00

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Re: Tax Return travel between lessons and home



#2 Sunday 13th January 2013 08:35:39

MGM
Verified Member
From: Surrey
Registered: Monday 24th October 2011
Posts: 861

Re: Tax Return travel between lessons and home

Wessex wrote:

Your home contains your office. When you start work you walk to your office
to sort out the day. You then leave the office, your place of work, to drive to meet a client.

BTW, don't forget to claim for a room as your office. It has to be exclusively used as an office.
You can then claim a proportion of your Gas, Electric, Water and Council Tax.  Not your mortgage though.

Mortgage interest is allowable, but not capital repayments.

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#3 Sunday 13th January 2013 12:23:11

Robbie
Verified Member
From: Shrewsbury
Registered: Sunday 29th February 2004
Posts: 1,230
Website

Re: Tax Return travel between lessons and home

One thing i was told a few months ago by another instructor who is ex accountant:

if you went to post office to post a letter or pay money in for business you can claim expenses, as its for business.
BUT if you then bought a sandwich in the same shop, you could only claim for 1/2 of the journey as its then classed as 1/2 business and 1/2 personal.
Thats if you wanted to be that precise with claims!!!

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#4 Sunday 13th January 2013 12:30:01

martin Williams
Verified Member
Registered: Friday 26th June 2009
Posts: 1,144

Re: Tax Return travel between lessons and home

Wessex wrote:

...
BTW, don't forget to claim for a room as your office. It has to be exclusively used as an office.
..

Are you sure that's right?

My accountant says that i can claim a % of the cost of a room even if it is used as a bedroom.

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#5 Sunday 13th January 2013 12:44:51

driverpete
Verified Member
From: Nottingham
Registered: Monday 6th February 2006
Posts: 457

Re: Tax Return travel between lessons and home

My accountant says that i can claim a % of the cost of a room even if it is used as a bedroom.

That is correct.


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#6 Sunday 13th January 2013 13:26:04

Triplea35
Verified Member
Registered: Friday 28th September 2012
Posts: 526

Re: Tax Return travel between lessons and home

The percentage is quite low depending on how many rooms in house and how many hours the room is used exclusively as an office. 

I started to work mine out and it was so minimal it was hardly worth the time working it out.

The HMRC will let you claim a small reasonable amount and would not  enquire into it. The latest example I recall seeing was 104 (2 a week) so thats what I claim.

HMRC manuals  HMRC very informative if you suffer from insomnia big_smile

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#7 Sunday 13th January 2013 13:47:01

MAZ
Verified Member
From: N/Wales, Cheshire
Registered: Tuesday 13th June 2006
Posts: 838

Re: Tax Return travel between lessons and home

I claim for 1/2 of one room = 1/6th.

Which equates to almost 17% of household bills i.e. repairs, heating, electricity, water rates, and mortgage interest.

If I really had the time I could sit and work out more. There is no reason why I could not charge the business for off road parking or use of the garage facilities etc, but it would take too long to get my head around.

It would be great if someone could put a driving school specific software package together to extract every morsel that is allowable.


Maz.

Last edited by MAZ (Sunday 13th January 2013 13:48:03)

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#8 Sunday 13th January 2013 16:47:31

Robbie
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From: Shrewsbury
Registered: Sunday 29th February 2004
Posts: 1,230
Website

Re: Tax Return travel between lessons and home

Ive never claimed for my office, all i claim for is my telephone bill, and thats in 9 1/2 years of being instructor

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#9 Sunday 13th January 2013 18:07:12

martin Williams
Verified Member
Registered: Friday 26th June 2009
Posts: 1,144

Re: Tax Return travel between lessons and home

Robbie wrote:

Ive never claimed for my office, all i claim for is my telephone bill, and thats in 9 1/2 years of being instructor

Oh dear as you can claim around 10 to 15 quid a week for using part of a room for an office you are around 350-500 quid a year out of pocket.  sad

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#10 Sunday 13th January 2013 20:28:46

Triplea35
Verified Member
Registered: Friday 28th September 2012
Posts: 526

Re: Tax Return travel between lessons and home

Maz,

Your claim of 17% (1/6th) of all bills suggests that your home has only 3 rooms and that you spend 50% of your time in one them using it as an office for your business. Do you never go out on lessons? smile

Martin Williams,

I can't see how Robbie is that much out of pocket even if he had claimed 10 to 15 a week.

10 x 52 weeks = 520 x (20% income tax and 9% NI contributions) = 150

15 equates to 226 using above calculations, worst case scenario unless a higher rate tax payer.
(Don't rub salt in the wound! wink )

At the end of the day you can claim what you like, it's only if your inspected that you will have to justify it.

Personally, i offset a large chunk of tax liability by contributing to a SIPP (pension) which few ADI's that I know seem to give any consideration to.

Last edited by Triplea35 (Sunday 13th January 2013 20:36:57)

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#11 Sunday 13th January 2013 21:16:28

MAZ
Verified Member
From: N/Wales, Cheshire
Registered: Tuesday 13th June 2006
Posts: 838

Re: Tax Return travel between lessons and home

Yes tripea35 you are right a miscalculation, half of one room from 6 is only 8.3% but you dont have to be using the portion of the room 100% of the time, if driving school/business paraphernalia takes up half the room that portion can not be used for other purposes. Still worth claiming for though, as is everything else.

Maz.

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#12 Sunday 13th January 2013 22:19:56

martin Williams
Verified Member
Registered: Friday 26th June 2009
Posts: 1,144

Re: Tax Return travel between lessons and home

I stand corrected Triplea i was miles out.

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#13 Monday 14th January 2013 22:14:13

Cat8t3
Verified Member
From: Droitwich - Worcestershire
Registered: Tuesday 28th August 2007
Posts: 339

Re: Tax Return travel between lessons and home

I went to a Tax workshop at HMRC a few yaers ago, and the lady running the workshop said you can claim for a % of all bills, and morgage interest, but you must be careful as you then might be liable for business rates on the council tax, and if you were to sell your home, you may owe the tax man money, (just like you would if you claimed 100% capital allaowance on a car and then sold it) She said you can calim 3 a week without it being questioned.

I claim, 3 a week and my complete mobile phone bill, and all stationary expenses, like paper etc.


1st Check Test 15/09/2010 - Grade 4
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#14 Monday 14th January 2013 23:54:59

Triplea35
Verified Member
Registered: Friday 28th September 2012
Posts: 526

Re: Tax Return travel between lessons and home

yep attended the same courses Cat and seem to remember thats why I also chose to claim a small minimal amount. The female tax Inspector at my workshops was actually married to a driving instructor and had been doing his accounts for years so gave some very useful job specific advice.

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#15 Tuesday 15th January 2013 01:26:44

Lady-Hynarc
Verified Member
Registered: Monday 9th April 2012
Posts: 650

Re: Tax Return travel between lessons and home

Cat8t3 wrote:

I went to a Tax workshop at HMRC a few yaers ago, and the lady running the workshop said you can claim for a % of all bills, and morgage interest, but you must be careful as you then might be liable for business rates on the council tax, and if you were to sell your home, you may owe the tax man money, (just like you would if you claimed 100% capital allaowance on a car and then sold it) She said you can calim 3 a week without it being questioned.

I claim, 3 a week and my complete mobile phone bill, and all stationary expenses, like paper etc.

3 what a week?

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#16 Tuesday 15th January 2013 03:57:30

Triplea35
Verified Member
Registered: Friday 28th September 2012
Posts: 526

Re: Tax Return travel between lessons and home

3 pounds, the pound sign seems to disappear on all posts.
Here is an online course I came across: HMRC Course
Includes a lot of info re expenses etc.

Last edited by Triplea35 (Tuesday 15th January 2013 04:04:44)

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#17 Tuesday 15th January 2013 10:08:32

kaf
Verified Member
From: Wiltshire
Registered: Sunday 5th August 2007
Posts: 3,330
Website

Re: Tax Return travel between lessons and home

I claim 300 pa for home office costs.

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#18 Tuesday 15th January 2013 14:42:09

robcooling
Verified Member
From: Nottingham
Registered: Thursday 2nd April 2009
Posts: 1,451
Website

Re: Tax Return travel between lessons and home

My accountant says that i can claim a % of the cost of a room even if it is used as a bedroom.

I think someones already mentioned this but if you do this you have to be aware of the consequences when you sell the house, as the relevant amount of profit from the house sale will become declarable business income to be taxed on your self assessment.

Same as when you sell a car which you've declared against your income.


Rob

http://www.appledriving.co.uk - Driving Lessons in Nottingham

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#19 Tuesday 15th January 2013 17:51:04

martin Williams
Verified Member
Registered: Friday 26th June 2009
Posts: 1,144

Re: Tax Return travel between lessons and home

robcooling wrote:

My accountant says that i can claim a % of the cost of a room even if it is used as a bedroom.

I think someones already mentioned this but if you do this you have to be aware of the consequences when you sell the house, as the relevant amount of profit from the house sale will become declarable business income to be taxed on your self assessment.

Same as when you sell a car which you've declared against your income.

There will be no extra declarable business income when you sell your house if are buying another house of same or more value as it off sets any profit from the sale, as long as the new home is used the same way.

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#20 Tuesday 16th April 2013 23:03:37

kjmcculloch
Member
Registered: Tuesday 16th April 2013
Posts: 14

Re: Tax Return travel between lessons and home

I tried to answer this earlier, but because I linked to an article on my website the post was deleted.  I will try to help without linking.

There are two things you need to give consideration to when opting to run your business from home. They are your business expenses and Capital Gains Tax.  For the business expenses there are two ways to claim.  I call them the apportionment method and the lazy option.

The lazy option first - HMRC allows employees who work from home to claim a flat expense rate of 4 per week, this is normally acceptable for self employed too.  However with a wee bit of work you can end up a lot better off, thats where the apportionment method comes in.

This option is best if you work from home more than a few hours per week. For this you'll need to do a bit of calculations to find out how much you can reasonably apportion to business use.

Calculate your annual costs of:

Council Tax
Mortgage Interest (not capital repayments)
Rent
Gas
Electricity
Home Insurance
You then need to calculate the amount of your home used for business. The easiest way to do this is to count all the rooms in your home (excluding hall, bathrooms and toilets). Use this figure to work out how much of your home is used for business.

Example:

We have a 3 bedroom house, with one living room, one kitchen and one dining room. We use one of the bedrooms for business purposes. The portion use is 1/6 for area.

Next we need to assess the time spent on business. So lets assume we use the room for 7 hours per day for business purposes and the kids use it for 2 hours to do homework. The portion of use is 7/9 for time.

Our costs are:

Mortgage interest    2400
Insurance     360
Gas     700
Electricity    1000
Council Tax    1200
Total Costs    5660
Claimable Expenses = 5600 x 1/6 x 7/9 = 726

You'll see how taking a bit of time can benefit you. We have claimed 570 more by taking some time to calculate our usage accurately.

If you are a basic rate taxpayer you would save 114 by calculating your expense this way, or 228 for higher rate tax payers.

Capital gains tax was raised by a previous poster, and this can be a problem but as long as you don't claim 100% of your time in the above calculation you will not become liable for Capital Gains Tax when you sell the house. Make sure you use the room for more than just business.  Even if you are liable each year you have a personal allowance which in a normal situation will more than cover any increase in your homes value for the room you use.

Kris


I'm an accountancy provider for driving instructors.  Feel free to visit my website dedicated to driving instructors.

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