As a CIS subcontractor you are classed by HMRC as being self-employed. This means that you can offset business expenses incurred against your total profits when working out your tax. To qualify, all expenses incurred must be wholly and exclusively for the purposes of your trade. These will be deducted from your gross income.
Common examples of allowable expenses would be:
- Motor expenses – Where a mileage log has been maintained
- Telephone – Mobile and use of a home phone
- Internet – Business element only
- Small tools – where there are replacements or repairs
- Use of home as office – can be claimed at £4 per week
- Rent and rates – where a property is required for the trade
- Light and heat – on a business property
- Travel and subsistence – where you are required to work away from home
- Printing, postage and stationery
- Accountancy Fees
- Insurance – such as professional indemnity insurance
- Subscriptions – to a professional body associated with the trade
- Advertising and promotion
- Bank charges and interest
You can also claim capital allowances on any items of plant or machinery that you may need to purchase.
Completing your self-assessment tax return
As a self-employed person, it is a legal requirement to complete a tax return each year. The return must include all of the details of your self-employment plus any other sources of income. You are also required to keep evidence of all of your income and expenditure during the year as this would be required by HMRC should you ever be selected for an inspection.
At Simplyco we make sure that completing your tax return is as easy and hassle-free as possible. All you need to do is forward all of your receipts and mileage records as well as details all of your income and we will take care of all of this for you. Simple. This service costs just £175 + VAT.
Simplyco are expert contractor accountants and give the best advice around to contractors, freelancers, interims, locums and the self-employed. To enquire about our services, please give us a call on 01900 898 440 or email firstname.lastname@example.org.
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