The surprising things you may be able to claim against tax

accountant filling the forms...

Self-employment is booming in the UK, with more than five million people working for themselves at the beginning of this year.

And if you're one of them, you can claim expenses against your tax bill. Nobody wants to hand over more of their hard-earned cash to HMRC than they actually have to - so do you know what's claimable, and what's not?

SEE ALSO: Rise of the self-employed could cost UK £3.5bn a year

SEE ALSO: Designer jeans and betting slips among 'ludicrous' expense claims on tax returns

It's pretty obvious that you can claim for items such as stationery, travel and tech expenses such as an internet connection or a PC printer.

You may also know that you can claim for the use of part of your home, for protective clothing and even for gifts to charity.

But according to tax adviser and accountant of Easy Tax Returns Jonathan Amponsah, many of us are missing a trick. While you're only allowed to claim for costs incurred 'wholly and exclusively' for your business, the rules may not be quite as prescriptive as you'd think.

Here are a few things that you may be able to claim - and trim quite a bit from your tax bill.

You can't generally claim back the cost of wining and dining a contact - but in certain cases you can. When it's a question of staff entertainment, for example, you can claim £150 a year per head. And, it may surprise you to hear, being a one-man band doesn't rule you out. If you're the director of a limited company, you can still claim this expense because you're classed as an employee.

You can also claim for entertainment when it's actually part of your business - for example, if you're providing a training course to businesses and giving them lunch.

"Also, the main one is where there is a quid pro quo, for example you're a freelance journalist and you want to give someone lunch. Normally that person would charge you for that information, but you agree to take them out for lunch in exchange," says Amponsah.

"That actually works for businesses as well. If you take a new prospect out they obviously don't bring anything to the table, but if it's somebody that has information for which you'd normally be charged, that is allowed as entertainment."

This one really might surprise you - and, to be fair, you're certainly not able to claim for your week in the sun in the normal run of things.

However, contrary to what many people believe, you can mix business with pleasure, for example by extending a business trip, even though the journey has a dual purpose. All that matters is that business be the primary purpose.

If, say, you spend £1,000 on the business trip and then stick around for a couple of days' R&R for a cost of £200, you can then pay the company back £200 and still claim the £1,000 against its income, as the primary purpose of the trip was for business.

Similarly, you can bring your spouse, even when they're not a business partner or employee, as long as you separate the cost.

What you can't do, though, is go on holiday, decide to do some business while you're over there, and then put it through as a business expense. Because the purpose of the trip was personal, you can't claim any of the cost incurred.

And the really surprising ones
School fees, care home fees, staff holidays and even golfing lessons can be claimed if you run your business through a limited company rather than sole trader or partnership - in certain circumstances.

You're allowed to provide your employees - including yourself, as director - with vouchers that they can exchange for a holiday, for example. And HMRC allows you to claim against this, as long as you report this cost as a benefit to your staff, much like a company car or medical benefits

The company then pays Class 1 National Insurance on the cost and you as an employee pay tax on it, either 20 or 40%; and the company can claim the cost of this benefit against its income.

But be careful
Some people seem to think that they can claim for every aspect of their lives: Amponsah says he's had clients trying it with "food for their pets or a Sky subscription, because they believe they have to entertain themselves when they are at home."

But your tax bill really isn't a case of 'try it and see', as you'll only be drawing attention to yourself - making it more likely that HMRC will go through your accounts with a fine-toothed comb.

Ten terrible tax excuses
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Ten terrible tax excuses

HMRC has revealed the 10 worst excuses people have given for missing the 31 January tax return deadline. The excuses were all used in unsuccessful appeals against penalties for late filling and payment.

Top of the list was “My pet dog ate my tax return…and all the reminders.” It's the school homework classic that never gets old.

One taxpayer argued “I was up a mountain in Wales, and couldn’t find a postbox or get an internet signal.”

It’s not thought that he was up the mountain for the entire ten months - which would indicate a particularly slow ascent.

One person tried to get away without penalties by claiming “I fell in with the wrong crowd.”

Presumably this was some sort of anti-tax, paperwork-eschewing crowd, who ought to take full blame for the fact that you couldn't be bothered to fill in your form.

One of the most fanciful excuses was “I’ve been travelling the world, trying to escape from a foreign intelligence agency.”

It’s an impressive level of excuse, although it might make quite a dull episode of Spooks.

One person tried to claim “Barack Obama is in charge of my finances.”

It would clearly explain why the tax return was late, because Obama has probably been a bit busy recently.

In an excuse which seems to have come directly from ‘My Family and Other Animals’, one taxpayer said: “I’ve been busy looking after a flock of escaped parrots and some fox cubs.”
This taxpayer didn’t bother altering the excuse they usually use at work for missing deadlines and claimed: “A work colleague borrowed my tax return to photocopy it, and didn’t give it back.”

One taxpayer argued “I live in a camper van in a supermarket car park.”

While that could make online submission a bit tricky, it doesn’t fully explain why they weren’t able to complete a paper return or leave the van to find somewhere more suited to paperwork completion. Perhaps the supermarket cafe would have sufficed.

If in doubt, point the finger at your other half.

One person used the brilliant excuse that “My girlfriend’s pregnant”: presumably they weren't to blame for that either.

One person blamed the fact they had been in Australia - where computers and the internet presumably haven’t been invented yet.

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