Self-employed person claiming expenses on tax returns

pwd

Complete newbie with this:

I bought some software for work (Norton Ghost) this year. Can I claim this as an expense?

I bought a hard disk (for storing ghost images and backing things up) as well as an optical mouse for graphics. Can I claim deprecation on these as expenses? What fraction of their cost can I claim if so?

Can I claim a portion of my rent as an expense, when I do some work from my flat? I worked out that my desk takes up 5% of my total living area. Does that mean I can claim 5% of my rent as an expense? Can I only claim that as an expense for weeks where I have done work at home?

I didn't include any expenses in my preliminary taxes for this year, as far as I remember. Will it be ok for me to include expenses from before i filed that return, even though i didn't include them in it?

I would like to get a new monitor. A tft one with tv tuner would be really appealing since I could get rid of my old crt and tv and spare up plenty of space in my flat, which is a wee bit cramped. Would the tv tunder feature make it impossible to claim deprecation on this as an expense? Or could I work out the cost of it without the tuner or something? Claiming for a telly would be taking the piss really

Apart from bus and dart tickets, what else can I claim, if anything?

Capt'n Midnight

pwd wrote:

Trying to use up a few hundred euro on expenses by the end of the year to reduce the amount of tax I'll have to pay. I could dowith a new monitor, and since space is really limited, a tft with tv tuner is attractive. But I can hardly claim the deprecation of a tv as an expense can I!? Could I work out the value of the monitor minus the tv tuner maybe? I'm an obvious newbie in this sort of thing

No idea if the revenue would work this way - but the tuner part is very cheap maybe a tenner in the factory.
Maybe get one without a TV tuner but with sVHS / Scart inputs - you could then use the tuner in a video..
you'd still need a TV licence...

shoegirl

If you have a VAT number you can claim the VAT back on everything.

The computer equipment you can certainly claim as an expense, keeping all receipts.

However if you try to claim part of your rent as an expense then your flat could be considered a business premises and you will be liable for business rates. However you can probably claim your phone bill and possibly some ESB/heating as expenses.

You should speak to your financial adviser who will advise on all possible claimable expenses.

pwd

Thanks both of you!
TV tuner cards are available on dabs.com for the sort of price you say, with software to record what's on as mpgs too! I like that idea. Would actually make a small profit after selling the telly and buying that

Don't want to bring my own thread too far off topic. Any more info on what can be claimed would be appreciated. I don;t have a financial advisor and probably can't afford one (although I guess I could claim it as an expense if I did )

MrNuked

Victor would definitely know the answers for these. He's an accountant, isn't he?

Reyman

If you do any travelling as part of your job you can claim a mileage rate expense and quite useful subsistence rates if you're away from base for any length of time.

The rates are around Euro 1.16 a mile and Euro`136 for an overnight stay . There are proportionate allowances for 5 0r 10 hours away.

Let me know if you need the full details!

antoinolachtnai

Strictly speaking, I think you would claim the computer equipment as a capital allowance rather than as an expense. There is no such thing as 'depreciation' in tax. Capital allowances are the closest thing, and they are not quite the same. But this is geeky accounting stuff.

pwd

Well geeky accounbting stuff is exactly the sort of stuff I want to know!
How do I claim something as a capital allowance? What does that do? How much can i claim or whatever?
Could someone recommend me a book please?
Could I use an English or American book, or would I need one specific to ireland?

fintan

You would need an irish tax book, and make sure it is for the tax year that you are claiming for. My advice would be to get yourself an accountant, its too easy to miss something or make a mistake with this type of stuff. baring that, there is accounting / tax software out there that could do a lot of this stuff for you.

As for the tv tuner, you might be able to claim it if you said you had to have sky news / cnbc on during the day ? (pure speculation on my part)

Victor

MrNuked wrote:

Victor would definitely know the answers for these. He's an accountant, isn't he?

Whoa! The insults.

Victor

pwd wrote:

I bought some software for work (Norton Ghost) this year. Can I claim this as an expense?

I imagine yes.

pwd wrote:

I bought a hard disk (for storing ghost images and backing things up) as well as an optical mouse for graphics. Can I claim deprecation on these as expenses? What fraction of their cost can I claim if so?

You claim them as capital items (written off over 5 years(?) for office equipment), although if you are replacing a part (the mouse), you can write off the full cost in one year.

pwd wrote:

Can I claim a portion of my rent as an expense, when I do some work from my flat?

The advice I've had is don't, it brings too much hassl ein the form of contracts, rates and in any case make sure you are using Form RENT1 to claim rent relief anyway.

I didn't include any expenses in my preliminary taxes for this year, as far as I remember. Will it be ok for me to include expenses from before i filed that return, even though i didn't include them in it?

I don't think its a problem, if anything you will have overpaid on this basis.

pwd wrote:

I would like to get a new monitor. A tft one with tv tuner would be really appealing since I could get rid of my old crt and tv and spare up plenty of space in my flat, which is a wee bit cramped. Would the tv tunder feature make it impossible to claim deprecation on this as an expense? Or could I work out the cost of it without the tuner or something? Claiming for a telly would be taking the piss really

Get separate quotes for (a) TFT screen (b) TFT screen with tuner. Get two invoices (a) TFT screen (b) upgrade TFT screen with tuner.

Keep all the paper work.

pwd

Thank you very much, everybody who responded to me!
I found a leaflet which deals with this on http://www.revenue.ie/ - IT 48: Starting in Business - A Revenue Guide. Between this and the info in this thread, I feel like I know roughly what to do!

Keep all the paper work.

Going to start doing so now anyway! Pretty sure my receipts for at least ghost and some text books are long gone!

I bought a telly card seperately, to keep things straightforward. Leadtek TV2000 Expert (I think) in case anyone is interested this seems to be by far the best of the cheaper cards. Think it cost about 60 Euro including delivery.

pwd

Could I count a ram upgrade as an expense or only as a capital allowance?

hmmm

pwd wrote:

Could I count a ram upgrade as an expense or only as a capital allowance?

Capital items are generally items that have a lifetime longer than a year. Expenses are short term. Having said all that, it the cost is small enough then you can include it as an expense without much worry.

Victor

pwd wrote:

Could I count a ram upgrade as an expense or only as a capital allowance?

Upgrades are capital, repairs / replacing parts is current. Consumables are current.

David Stewart

One tax efficient way of purchasing equipment is to lease it. The lease payments are then considered running expenses rather than capital costs. However, be careful on two fronts: a) you may have a capital liability if the equipment reverts to you before the value is completely written off by the lease company and b) you may end up paying more in interest than you save in tax compared to an outright cash purchase.

Speak to a qualified accountant to get advice specific to your situation. Remember, advice is worth what you pay for it. :-)

antoinolachtnai

Leasing is a good way to conserve capital, and it removes the timing difference between capital expenditure and the capital allowance. These things are important for a small business obviously, because they can help you avoid running out of cash.

But I don't think there's any reduction in the amount of tax you have to actually pay, is there? (Obviously you benefit from the 'tax shield' that the interest bill gives you, but you could get that with an overdraft or term loan).

eth0_

I'm a bit confused with all this.
I'm going to be contracting from next week, working under an umbrella company for tax purposes.
I want to buy a new laptop...do they write off the entire value of the laptop against tax, or just the VAT charged on it?

Confused!

antoinolachtnai

They don't 'write off' the vat, they offset it against the vat collected on invoices sent.

You get a capital allowance against income tax for the laptop.

eth0_

Sorry i'm lost when it comes to tax things..
If the laptop cost 1500 euro and I said I used it 2/3 of the time for work, does that mean 1000 euro of the value is written off against tax, spread over the rest of the tax year?

antoinolachtnai

I assume you mean 1000 euros ex-vat. Obviously if you are not using the computer wholely for business purposes, you might not be entitled to offset the full vat amount either.

But onto your specific question, no, the allowance is spread over a number of tax years. I think 3 for stuff like computers. It is a capital item, not a business expense.

mctechie

A great way to legitimately claim tax free expenses from your business is by tracking your motor expenses. I've always found this a pain to do in real life, as I kept loosing the sheets, forgetting to record the mileage etc.

So I finally bit the bullet and decided to design a Motor Travel Expense tracking spreadsheet using Google Docs,

By using Google Docs its available to me anywhere I have internet access (i.e my laptop) and my expenses are calculated in real time as a running total.

The spreadsheet automatically changes the rate depending on the amount of km's travelled (over 6437km per annum and the allowance rate changes).

So at the end of the month, everything is neatly calculated and recorded as per the revenue's guidelines.

I spent ages looking for a decent solution on the web and finally decided I needed to 'roll my own'. If anyone would like a copy of this spreadsheet, PM me if you want a copy.

Regards,
Martin C.
http://www.techielive.com

kingofslaves

I've just registered my business name with the CRO and got my registration number. I have also sent the revenue forms off for registering for tax. I had already registered online and because I wasn't clued up, I registered for VAT. I now have cancelled that and re-registered without the VAT registration.

I need a new computer and wanted to know how I go about it. Do I buy the computer, keep the reciept and then send it to the revenue for them to refund the money? Or do I just get a percentage ?