Question About Tax Deductions.

[storm_petrel]

I’m self employed and had to do a big repair to my works van in July 18 . The repairs cost over £4 grand which I couldn’t pay off all at once so had to put it on a card. I've been paying it off at £400 a month. When I come to do my Tax Return for 18-19 can I count the full Invoice against Tax, or should I count the repayments made so far on the card? I could do with writing off as much as possible this year as I’ve had some big jobs. Cheers

[TonyV]

Why not ask your accountant?

[EdmundD]

This may help. It says repairs and servicing is deductible if you're self-employed.

https://www.gov.uk/expenses-if-youre-self-employed/travel

[storm_petrel]

TonyV I don't have an Accountant .

EdmunD yes I know what I can deduct and what I can't. That was not the question, but thanks for the link.

Ketoblast ????????????????????????

[EdmundD]

I would say it's the invoice not the amount paid.

[EdmundD]

But if you have an accountant I would ask. If you don't and aren't sure ask HMRC.

[storm_petrel]

Edmund. Thanks, I have not got an Accountant, my books are quite simple and its easy to do an online Return. The HMRC has no information on my particular question. I thought I would ask on a Q&A forum.

[spathiphyllum]

I’d say repayments made so far personally, as ypu’ve not yet paid the money for the foreseeable future, even though you plan ok it.

[Neveracrossword]

When will you be doing the 18/19 return? If it's not until the new tax year, you'll know exactly how much you've paid, and might even have cleared it.

[TonyV]

Sorry Storm, but you can only claim for your actual outgoings, not your potential ones.

[Rockrose]

Only what you have paid so far not the whole invoice.

[storm_petrel]

Thanks for the replies. It seems correct to claim for what I will have paid off by April 2019. I do my Tax Return in June.

[Hopkirk]

Can you not deliberately misunderstand and put the whole repair cost down? What's the worst that could happen?

[TonyV]

Hopkirk just a fine

[EdmundD]

With the caveat that I have no experience of accounting for self employed businesses the taxman is not usually interested in the cash flow aspect of a business.

In the corporate world if you invoice a customer that is deemed to be part of your revenue in that year for tax purposes regardless of whether the customer has paid the invoice or not. The taxman will only be interested in that aspect if in a subsequent year you claim bad debt relief because the customer has failed to pay and is not likely to pay.

Similarly, if a supplier invoice is received or an expense is charged the taxman doesn't care whether you have paid it or not - it is a business expense incurred in that tax year and may be offset against the revenue in the same year if allowable.

[pjgriffo]

EdmundD has given the correct answer and the supporting logic. You can claim the full cost whether paid or due to be paid. The remaining balance will be a creditor in your accts at the year end i.e. a cash flow issue, not a profit /loss issue.

[Peter Pedant]

sorry - thought you were repaying the repairer on the drip

BUT - you paid off the repair bill with money from the card
so that is an expense on the date you made the payment
and you will have a receipt from the repairer

Then say over two years you are paying off the capital sum on the card - this is NOT deductible ( or else you would be charging twice against tax) BUT
any interest for THAT payment would be a business expense in the year in which it occurs

No I am not an acct - but I am pretty sure I am right

and jesus 'why not ask your accountant'? even I can see that if you had an accountant, then you wouldnt be bothering us walk-in bozos

anyway have a good night and make sure it is ALL IN by the 31st
( psst ! I have done all mine AND paid the balancing amount!)

[storm_petrel]

Come back to some really good answers. I've got the full receipt and it was paid on the Invoice date by Visa Credit. Reading further answers I'm going to put it all through the 18 -19 Returns'

Peter. I did my 17-18's last June. I'm on CIS so HMRC always owe me at least £1,185 so the quicker I claim it back the better.

[cassa333]

Do you pay 8nterest on the cc payments? If so are they tax deductible?

[ToraToraTora]

if you have a fully paid invoice then offset the whole lot. How you repay it is a private matter, you have paid it out that's all they need to know.