Wednesday, 23 July 2008

Clothes and tax

Hi it's Ben,

I had a chat with a friendly accountant last week - he gave me lots of good advice and in return I bought him glasses of wine.

He said a few interesting things. Here are a few highlights:

1. Claiming for the mileage from your home to the yoga studio or village hall is not allowed as it is considered private use, just as business people cannot claim mileage for their commute to work.

2. Claiming for clothing used specifically for teaching in is allowed.

3. Whilst it is possible to claim for teas, coffees and lunches with potential students, it is silly to put them under a 'client entertaining' category. Better to put them under 'sundries'.

4. It is more acceptable to 'make a loss' as a sole trader in the first year because of the new business costs but if you go on making a loss year after year, the tax office may look closer.

5. Get receipts from the people who rent the yoga hall to you (I forgot).

It does seem that there are different ways of doing things and one accountant will give one set of advice while another will say something else so if you have heard different pitch in your tips.

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