Do Sweat The Small Stuff

Tax

October 18, 2019

Our job as expert tax advisors is to reduce our client’s tax to the lowest amount possible within the rules, and we see time and again taxpayers missing out on tax relief on the small stuff that doesn’t seem to matter.

The thing is though, those extra expenses that might have been missed would reduce your tax at the marginal rate, and for some taxpayers earning just above £100,000, the marginal rate is a whopping 60%.

Sweat the small stuff

So that bottle of water that you lost the receipt for that cost you £2, could only cost 80p once the taxman has paid his share. So would you stop and pick up a pound your saw on the floor? Of course you would so why not claim those little expenses. Of course, these little amounts can add up, even if you only get tax relief at 20% or 40%, one bottle of water a day claimed, could save over £200 in a year.

Don’t forget if the expense can be claimed through a Limited Company that you own, it can be even better. The expense qualifies for 19% corporation tax relief and you can be reimbursed in full by the Company for something which otherwise would have been paid out of your net of tax drawings. That means a double saving.

Expenses to Consider

Things to think about that you might not be claiming [under the right circumstances]

  1. Drinks
  2. Snacks
  3. Breakfast, lunch and dinner
  4. Parking
  5. Mobile phone bills
  6. Tolls
  7. Train, bus and tube fares
  8. Taxi
  9. Broadband
  10. Stamps
  11. Office refreshments
  12. Light bulbs
  13. Bin bags
  14. Use of home
  15. Bleach
  16. and so the list goes on

It can be a pain to record it all, but if you get a company debit card, credit card, or Monzo card and use the contactless facility, then the bank and apps do the hard work. For expenses that can only be paid cash, use your smartphone with an app to record the transaction.

We reckon most self-employed people can get a tax saving of £500 per year by thinking about these small things.

You May Also Like…