Sole Trader: Expenses +Tax

burly

Hi all.

I am currently a newly registered sole trader. Just trying to get my head around the tax etc.

I work from a home office, and use one of the family cars to visit various site, and meet Clients etc.

Can I write off the vehicle running costs against my tax? And what about the heating/electricty/broadband etc.

Obviosuly I use theses utilities in my home normally anyway, but the usage will dramatically increase now that I am working from a home office.

Anyone in a similar position able to offer any advice?

Thanks

Marcusm

You are entitled to a deduction in computing your taxable profits for expenses of a revenue (ie not capital) nature laid out "wholly and exclusively" for the purposes of the business. Theoretically, the fact that you have a single electricity meter and telephone should preclude you from a deduction but this has never been the practice in Ireland. An appropriate portion of the expenses will be deductible; best to retain past electricity bills for the past as comparison (number of units likely to be appropriate) and get itemised telephone bills. Assuming you own your house, you will not be able to impute any rental element for the part you are using as your business premises.

burly

Marcusm wrote: »

You are entitled to a deduction in computing your taxable profits for expenses of a revenue (ie not capital) nature laid out "wholly and exclusively" for the purposes of the business. Theoretically, the fact that you have a single electricity meter and telephone should preclude you from a deduction but this has never been the practice in Ireland. An appropriate portion of the expenses will be deductible; best to retain past electricity bills for the past as comparison (number of units likely to be appropriate) and get itemised telephone bills. Assuming you own your house, you will not be able to impute any rental element for the part you are using as your business premises.

Does the same rule apply to the car? And who decides what is appropriate? Do I make what I believe to be an appropriate claim, and Revenue then assess it?

nompere

Tax works on a self-assessment basis - so in the first instance you (with professional help, if you want it) decide what is appropriate. Revenue then have the right to audit your return.

Historically, a claim that 1/3 of motor expenses relates to private use, leaving 2/3rds as business use, has usually been acceptable. Claiming a larger proportion is more likely to be viewed critically by a Revenue auditor, and you would need to keep log books, etc to justify such a claim.

megapum

I am sole trader with online website selling supplements working from home. Is any list of expenses (full, partiall or depreciation expense) which I can claim?

Citizenpain

megapum wrote: »

I am sole trader with online website selling supplements working from home. Is any list of expenses (full, partiall or depreciation expense) which I can claim?

http://www.revenue.ie/en/business/running/allowable-expenses.html