Have you paid too much tax?
DID YOU KNOW?
As a director or employee, you’re entitled to a tax deduction for the cost of expenses and equipment you purchase and use in your work dating back 4 years. Capital expenditure is excluded but instead, the capital allowances rules determine the deduction that can be claimed. You must have incurred the cost yourself and not been reimbursed by your employer for the expense.
A condition for directors/employees is that the expenses and equipment must be required for your work such as a computer if you’re an office worker or a camera if you’re an estate agent etc. Cars and Vans do not qualify but a mileage rate deduction is allowed instead.
A claim for capital allowances must be reduced to reflect any private use and also adjusted if the employment commenced part way through the year. You must have paid tax in the year you are claiming for, and you must keep evidence of the items purchased.
Unless you spend more than £1m on equipment you can claim a Annual Investment Allowance tax deduction for the full cost for the tax year in which you buy it.
HOW DO I CLAIM?
You can claim your business expenses and capital allowances either on your Self Assessment or if your expenses are £2,500 or less you can claim through your government gateway account online. You can also print, complete and send form P87 to HMRC by post.
Published HMRC guidelines:
For further help and advice, please contact Argyle Accounting and we will be pleased to assist.
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