Deductible Expenses for the Self-Employed

j_dub

Hi,

I have three questions re deductible expenses - wondering if anyone knows the answers?

Firstly, can I claim petrol expenses to and from my workplace(s) - I know that I can't claim civil service mileage rates, but can I claim the actual expenditure to my workplace (same places every day). I was going to keep track of mileage and petrol receipts and then calculate the deductible amount by working out the proportion of 'business' mileage and multiplying this by my actual petrol expenses. If this is ok, I had intended on applying the same logic to my other motor expenses, albeit not sure if I could apply this to the likes of very irregular expenses such as NCT etc.

Secondly, in terms of Wear and Tear calculations, what is an appropriate source to use to put a value of my car and at what point in the year should this be done?

Lastly, I am and have been attending numerous courses relating to setting up my own business and training that I am undertaking with a view to using my training to create further self-employed income in the future - can I write these expenses off if I am not yet working in the fields to which the courses relate? I would add that prior to becoming self-employed, I spent thousands on a course which I am in the process of finishing and I did not get any tax relief on this; can this expense from the last year be deducted from this year's accounts? I realise this is unlikely, but worth asking anyway.

Thanks very much.

Shane732

j_dub wrote: »

Hi,

I have three questions re deductible expenses - wondering if anyone knows the answers?

Firstly, can I claim petrol expenses to and from my workplace(s) - I know that I can't claim civil service mileage rates, but can I claim the actual expenditure to my workplace (same places every day). I was going to keep track of mileage and petrol receipts and then calculate the deductible amount by working out the proportion of 'business' mileage and multiplying this by my actual petrol expenses. If this is ok, I had intended on applying the same logic to my other motor expenses, albeit not sure if I could apply this to the likes of very irregular expenses such as NCT etc.

Secondly, in terms of Wear and Tear calculations, what is an appropriate source to use to put a value of my car and at what point in the year should this be done?

Lastly, I am and have been attending numerous courses relating to setting up my own business and training that I am undertaking with a view to using my training to create further self-employed income in the future - can I write these expenses off if I am not yet working in the fields to which the courses relate? I would add that prior to becoming self-employed, I spent thousands on a course which I am in the process of finishing and I did not get any tax relief on this; can this expense from the last year be deducted from this year's accounts? I realise this is unlikely, but worth asking anyway.

Thanks very much.

Yes you can claim actual expenditure incurred in relation to expenses incurred wholly and exclusively for the purpose of your trade. This would include expenditure on petrol in relation to work related business journeys.

The logic you have mentioned above would be an appropriate means of calculating the qualifying expenditure.

I'll answer the other queries when I get a free second. In the meantime have a read through the stickies as they may help you with your queries.

j_dub

many thanks you for your help

PS what's a 'sticky'?

Signed: person not familiar with Boards..

barneystinson

j_dub wrote: »

many thanks you for your help

PS what's a 'sticky'?

Signed: person not familiar with Boards..

If you go back out to the Taxation forum (or any of the forums) you'll see a number of threads at the top of the main forum marked "Sticky" - this means they stay at the top of the page, rather than being listed chronologically like the rest of threads below...

j_dub

Thank you very much

NCG

You cannot deduct the cost of getting from home to or from your "normal place of work". However, if you then have further journeys to other places of work (client/customer premises etc) this cost can be deducted.

j_dub

would anyone know the answers to the other two questions I had?

Shane732

When did you buy the car and for how much? One option is to get the cost of the car now on Carzone and use this as the value of it on the day you appropriated the motor vehicle from private use to business use. At the end of the day we're probably talking about small difference here so I won't get too hung up on it.

In relation to the college courses -

Where these courses non-qualifying courses for the purpose of claiming tuition fees relief?

The basic principle to apply is whether the expenditure was incurred wholly and exclusively for the purpose of the trade. If you can substantiate this argument then you should be entitled to deduct the expenditure from you income. In relation to the expenditure being incurred prior to you trading. This in itself shouldn't preclude you from claiming a tax deduction for the expenditure.

You can generally claim a deduction for pre-trading expenses incurred up to 3 years prior to the commencement of the trade/profession. Although it might be a bit of a push to claim relief for college courses as pre-trading expenses. have a look at IT48 for further information on pre-trading expenses.

Apologies for the delay in getting back to you.

nompere

Shane732 wrote: »

One option is to get the cost of the car now on Carzone and use this as the value of it on the day you appropriated the motor vehicle from private use to business use. At the end of the day we're probably talking about small difference here so I won't get too hung up on it.

Shane - Section 287 Taxes Consolidation Act 1997 disagrees with you. A taxpayer is only entitled to capital allowances for 8 years after purchasing the car - and the allowances are lost for any year when the car wasn't used for business purposes.

j_dub

thanks very much.

Yes the courses were non-qualifying for the purpose of claiming tax relief, however, I could not have moved into my current line of work without them (I needed the experience to change fields, hence it would seem reasonable to deem the expenditure tax-deductible?). I am also in the process of studying another field which I am not earning income from yet, but which I hope to earn income from in the future; I wonder if I could also justify that expenditure?

@ Nompere, I purchased the car second-hand a few years ago, I guess the 8-yr 'countdown' starts from when I purchased it?

thanks again for your help

Alemap

Shane732 wrote: »

When did you buy the car and for how much? One option is to get the cost of the car now on Carzone and use this as the value of it on the day you appropriated the motor vehicle from private use to business use. At the end of the day we're probably talking about small difference here so I won't get too hung up on it.

In relation to the college courses -

Where these courses non-qualifying courses for the purpose of claiming tuition fees relief?

The basic principle to apply is whether the expenditure was incurred wholly and exclusively for the purpose of the trade. If you can substantiate this argument then you should be entitled to deduct the expenditure from you income. In relation to the expenditure being incurred prior to you trading. This in itself shouldn't preclude you from claiming a tax deduction for the expenditure.

You can generally claim a deduction for pre-trading expenses incurred up to 3 years prior to the commencement of the trade/profession. Although it might be a bit of a push to claim relief for college courses as pre-trading expenses. have a look at IT48 for further information on pre-trading expenses.

Apologies for the delay in getting back to you.

Hi,

my query relates to the part about claiming pre trading college course as an expense.
I've looked at IT48, but couldn't see anything specifically about college courses.
Would the expense be allowed if it occurred while already trading?

Alemap

yes, I trained as a therapist and now trade as a therapist

Alemap

Thanks for your reply, you've been very helpful.
I've just read on a UK website, that if the training is to provide a proprietor with you new skills the cost should be capitalised (approx €16K) - would the same apply here.
Could you recommend somewhere I could get more detailed information?

dogsears

Alemap wrote: »

Thanks for your reply, you've been very helpful.
I've just read on a UK website, that if the training is to provide a proprietor with you new skills the cost should be capitalised (approx €16K) - would the same apply here.
Could you recommend somewhere I could get more detailed information?

You would be better off consulting a professional adviser - accountant or tax adviser. Some of that stuff gets fairly complex though I'd say the UK thing you read about is more relevant to where you're an employee of a business i.e. not where you're running your own business. NB While you're at it you should check the answer you got above about deducting the training costs.

Bobby1984

j_dub wrote: »

Firstly, can I claim petrol expenses to and from my workplace(s) - I know that I can't claim civil service mileage rates, but can I claim the actual expenditure to my workplace (same places every day).

I would seek professional advice where you can fully explain your circumstances before going ahead and claiming expenses as it could add up to a very costly mistake. If you are going to the same places every day Revenue could (and probably would) view these places are your normal place of work. How can you claim that your home is your normal place of work if you are never working from there???