[whohit]-Below Is A List Of Tax Deductions – See How You Can Save Money-[/whohit]

How To Pay Less Tax

Nobody like’s to pay the tax man but when you are legally self employed it is unavoidable, but having said that you need to be well informed on the items that you can claim tax back on. The list we provide is a comprehensive one that will show you all the tax deductions you can get.

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Phones, landlines and mobiles.

The charge’s you receive for the use of phone call’s and line rental’s can be claimed back if you are a sole trader or small business owner. These include business and personal phones such as your mobile phone. Director’s of limited companies or share holder’s can claim money back on home call’s only though.

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Travel and expenditure

This one is my person favourite, this is why. If I was on a business trip to New York and you travelled first class on the flight over and wined and dined at Donald Trump’s diner. Followed by stopping at the Hilton, all of these would be tax deductible. So in reality as long as your tax bill is high enough you could have a holiday for free.

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Your home

If you spend even the smallest amount of time in your property which is work related, you can deduct a proportion of the cost of the heating and lighting of the house. Also council tax can be used as a deduction as well.

The amount that you can claim back is worked out on the basis of how many rooms you have in the house. To give you a idea of what saving you are looking at. let’s say you use two rooms in your house for worked related activities, and you had a 3 bedroom house with a living room and kitchen. You would then be able to claim back approx 25% of the bills.

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The car

Sole trader’s and business owner’s can claim so much back on the cost of taxing, insuring, car repairs and fuel. All of the calculation’s are based on the mileage you notch up per year. Be aware though that the drive to and from your business does not fall into this section.

As well as the running cost’s you will be able to claim Capital Allowance. You will be able to get 100% on the first year off a new car. The capital allowance is restricted to the portion of use that the car is used for in your business.

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The Family

You can not directly claim for your family member’s but if you are cheeky with your accounting you can claim back tax from any relative that works for you. For example let’s say your son works for you doing customer service, his salary can be claimed back as a tax reduction. This way the money stay’s in the family.

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Loans and overdraft’s

Personal overdraft’s and loans do not count as a saving but loan’s and overdraft’s taken out using the business account are eligible. So the rule of thumb is always use the business for any loan’s.

 

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Favourite of mine “Parties”

You can claim back for parties that are for the business such as the Xmas party. The simple guide you need to work to is that you can not exceed £150 per person. So unless you are not having a party at the Hilton you can treat the staff to a great party or dinner and let the tax man pay for it.

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Decorating and furniture

The cost of decorating your business does have a tax deduction benefit which can also be claimed back on antiques and other item what customer may enjoy while they are in your business premise’s.

 

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Pension’s

You can claim back on your own pension contribution’s as well as employee’s pension’s. This counts if you are a sole trader of own a limited company. This tax relief can also be enjoyed by any family members that work in the business.

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Final thought’s

In reality this is not the total list of item’s that you can claim back on, the reason for this is that you can claim back for anything you can prove has been purchased for the business. Just be creative with you purchase’s.

Before you leave this page I wanted to make you aware of how you can get a payment back from the “Tax Man” if you are;

1) Self employed

2) Have invoiced one or a small number of VAT registered customers

3) Not VAT registered or account for VAT traditionally

If you answered yes to the three points above you qualify for a 30% of the VAT you would have paid for up to 4 years in arrears.

Plus moving forward from that point you will receive 40% of the VAT you charge customers. This will continue while ever you are registered for flat rate VAT.

Below is a example of a typical person earning £30,000 a year;

The lump sum payment is worked out as follows.

£30,000 x 4 years back dated = £120,000

20% VAT on that is £24,000

You get back £7,200 Just for registering for the flat rate VAT.

Moving forward on this you will also get back 40% of the VAT you charge customers. So if you earned £3,000 each month you would receive £240 back to you. So in reality you will get a £240 rise in the wages you receive each month.

This is a no risk hassle free scheme as the company accountants do all the work, pay the tax man his share and pay the rest of your VAT recovered directly to you.

If you would like to know more please fill out this form here and one of their administration team will be in touch with you to claim back this money for you.

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I do love informing people of how to get money back from the tax man after all the years of paying them myself. Hope this list of tax deduction’s has helped you as it did me when I first discovered them.