My first tax return...

[DNS1]

Went self employed last year and set up my limited company. I've not turned a profit yet but I'm having to make up the company accounts for my tax return.

Most of it is pretty simple, I gave the company a loan myself from redundancy pay and used it to buy equipment, tools, stock and pay my fees etc.

One of things I also used the company's loan for was to buy a DB and all the bits to fit in my own flat as my initial demo piece for the inspector.

I want to count it as a business expense, afterall it was necessary to get myself registered. If I'd installed it in someone else's property and let them have it for nothing as I was using it for inspection purposes all would be fine, but I'm a bit worried that HMRC are going to think I'm taking the p*ss by improving my own flat on company money!

What's the best thing to do here?!

 

[Kate]

Just put it through!!! Ive installed a shed load of LED downlighters in my own home and put materials through the business

 

[Dan]

Questionable but if it was work-related then perhaps put it through.

 

[Octopus]

Just "allocate" the costs to a paying customer!

EDIT : Why did you go limited straight away - sole trader would have been easier for you!

 

[DNS1]

Just "allocate" the costs to a paying customer!

EDIT : Why did you go limited straight away - sole trader would have been easier for you!

Didn't like the idea of potentially getting into debt and the banks coming after my house!

I should probably just put it through and forget about it, I'm just paranoid as I'm a new start up and I know I'm more likely to be investigated than someone who's been trading for years!

 

[Dan]

There are some awesome tax benefits with going sole trader first.

And you tend to find even with a Ltd company, creditors will want a directors guarantee now (still on your house).

A mate of mine went sole trader, traded a couple of years, went Ltd and sold the business to the ltd company resulting in a tax break, then after he'd expanded a few times and had VAT to claim back on vans and stock and whatnot, he hadn't paid tax for a couple of years anyway so only in year 4 he had to pay a small tax bill.

Well worth chatting to a decent accountant about the structure of your company and the projected turnover etc in the first couple of years because if they're low, you'd benefit being sole trader until it really gained credit and / or regular customers you're giving credit to etc.

 

[rmc86uk]

Get an accountant.

 

[Badged01]

.... but I'm a bit worried that HMRC are going to think I'm taking the p*ss by improving my own flat on company money! What's the best thing to do here?!

Its a tiddly bit of money to be worrying about but I think the technicality of it is that you've used it to improve your premises as part of your work so you are liable to some tax when you sell? An accountant would be able to tell you but the money you spend getting his advice would be more than the jobs cost you!

You pays your money and takes your choice ........

 

[Badged01]

Just put it through!!! Ive installed a shed load of LED downlighters in my own home and put materials through the business

You naughty girl ........ that I'm sure you can't do unlesss your house is a show room!

 

[HandySparks]

You naughty girl ........ that I'm sure you can't do unlesss your house is a show room!

You can always say that they're on long term test, before offering them to paying customers.

 

[telectrix]

and , of course, part of your house is your office, so claim a portion of the gas, leccy, council tax. your missus is a secretary , paid just below the tax & NI threshold.

 

[Octopus]

and , of course, part of your house is your office, so claim a portion of the gas, leccy, council tax. your missus is a secretary , paid just below the tax & NI threshold.

Which only works if she doesn't have a job/income of her own

 

[Badged01]

and , of course, part of your house is your office, so claim a portion of the gas, leccy, council tax. your missus is a secretary , paid just below the tax & NI threshold.

.... and part of the the mortgage if you have one!