Claiming back on old tools

[Fi Wilson]

Grr!!! This is driving me maaaad! I remember seeing a post from someone about being able to claim on their tax return for tools they had before they became self-employed and that you just had to get a reasonable second-hand costing from somewhere such as ebay. Was I dreaming this or is this the case? I've had a look through the other tax related threads but can't for the life of me find the thread that I thought this was in.

I've just usefully found out that the Class 2 NI contributions I was told I had to pay by my local tax office, even though I told them I have a full-time job and am paying Class 1 contributions already, don't actually have to be paid so I can get a refund!!! Hurrah!!!! I've now got to do some costings and send them to HMRC to prove that I will not earn £5,075 on my jewellery by the end of the tax year. I've not done a tax return yet so I want to make sure I'm including all relevant costings. (:Y:Thanks to Annie for her useful list back in August from her HMRC workshop!)

Fi

[minnie]

The rules say that any expenses accrued in materials etc in the 6 years before you start your business are allowed. So materials etc are allowed so long as you have receipts etc

YOU NEED TO CHECK ON THE THINGS ALLOWED

The tax office run very good days on how to run your business and how to submit your turn.

They are free just contact your local Inland Rev office.

[Ominicci]

I think that was me Fi, but I can't find the post either. I went on the free HMRC courses that Christine mentions.

On the course they said that you can claim for any tools you had before you started self employment but only the second hand price. It was suggested by the tutor that you use Ebay to look up the items and print out the page to show the going (secondhand)rate.

[Fi Wilson]

Oops, sorry Nicci, it was you - I remember your logo now. The very useful man on the tax helpline gave me a number to get on a workshop so that's on my list of to do's. Think I'm going to be blitzing ebay for second hand prices this weekend then.

Fi

[Solunar Silver Studio]

I think that was me Fi, but I can't find the post either. I went on the free HMRC courses that Christine mentions.

On the course they said that you can claim for any tools you had before you started self employment but only the second hand price. It was suggested by the tutor that you use Ebay to look up the items and print out the page to show the going (secondhand)rate.


I think this might have been it - but it only mentions it in passing...you don't go into details! http://www.cooksongold.com/forum/business-marketing-jewellery-industry/825-start-up-calculator.html

[Lisa Quinn]

That's a bit poor isn't it, for example if I bought a rolling mill in November and 2 weeks later I went to a fair as my first business outing and advised the tax office that this was my start date, are they saying that I would have to put a second hand value on that mill for tax purposes?

[Ominicci]

Yes because you weren't registered as self employed when you bought the mill. At least they do actually acknowledge tools previously bought, as a lot of people setting up their own business often do so from a hobby and therefore have a lot of the tools already. HMRC could take the line that only items bought after you started self employment count, but they don't.

Their official line of when the latest you must register as self employed is when you start advertising your business/service, not your first sale (the only exception to this is if you open a shop and the latest date you can register as self employed is the day you open the shop.) You can always register as self employed before you actually start selling. Which is what I did. I registered my start date as at the beginning of the tax year which is just easier for accounting purposes.