Reclaiming tax back on items bought for work

[theboyfold]

Currently on a PAYE scheme 3 days of the week and self employed the rest of the week. Now that the work is starting to come in on the self employed side I'm going to need to buy a laptop and a few other bits and pieces for my work.

What are the rules about claiming the tax back on purchases like laptops and tools that I use for work? Am I allowed to do this come tax return time?

[theboyfold]

Eric Mc said:

You are now a sole trader and therefore you will need to produce sole trader accounts and complete and submit a self assessment tax return after the end of the current tax year (5 April 2010). You will also need to notify HMRC that you have commenced sole trading within theree months of the commencement date.

Sole trader accounts, does that basically mean showing my income and expenses in earning this income? Things like travel, equipment and duck houses

Eric Mc said:

When completing your annual sole trading accounts and self assessment tax return, you will, as part of the process, make the various expense and allowance claims you are entitled to. Regarding Capital Expenditure, small sole traders (like yourself) can claim a 100% write off of equipment, machinery and office equipment against your business profits as long as the expenditure in the year does not exceed £50,000 in total.

So forgive my ignorance, but if I earn £1000 and spend £500 on something needed for work, I'm liable to pay tax on the remaining £500? Might be over simplifying it, but is that the gist?

Eric Mc said:

Motor cars are excluded from this 100% allowance.

As ever Eric, thanks for your help!

[theboyfold]

Thought as it's about money, that's where it should go. Should it be in business?

[theboyfold]

Maybe we need a staging forum where posts can be validated and then filtered into the correct sub-forum!

Edited by theboyfold on Monday 8th June 14:50

[theboyfold]

That coming from a man who deals with the UK tax system!!