Tax deductible?

[Frankeh]

I'm thinking of starting a web business. Details are thin at the moment but I know I will need the following to run the business effectively:

A dedicated server. Roughly £60 a month.
An internet connection and phone line. About £20 a month.
Paypal fees.


Are any of those tax deductible?
Is there an explanation somewhere of what is/isn't tax deductible?

Thanks in advance.

Edited by Frankeh on Thursday 4th March 17:04

[Eric Mc]

Costs incurred wholly and excluisvely for the purpose of a terade are deductable for tax purposes.

[Engineer1]

What happens if you have home broadband from a provider like SKY where the TV is an integral part of the telephone and broadband package, how do you go about claiming those expenses?

[miniman]

Frankeh said:

I'm thinking of starting a web business. Details are thin at the moment but I know I will need the following to run the business effectively:

A dedicated server. Roughly £60 a month.
An internet connection and phone line. About £20 a month.

I think you might be underestimating the cost of running a "web business". What are you planning to put on this server?

[Frankeh]

I'm not, IT is what I do.
The application I need is bandwidth intensive, not hardware intensive, hence the low cost server. Most of the costs will be incurred by bandwidth charges.
That and advertising. But it's quite a niche and the keywords dont cost much and have low search volume.

Is advertising tax deductible? Im guessing not since it's directly generating sales.

Edited by Frankeh on Thursday 4th March 22:02

[Eric Mc]

Frankeh said:

I'm not, IT is what I do.
The application I need is bandwidth intensive, not hardware intensive, hence the low cost server. Most of the costs will be incurred by bandwidth charges.
That and advertising. But it's quite a niche and the keywords dont cost much and have low search volume.

Is advertising tax deductible? Im guessing not since it's directly generating sales.

Edited by Frankeh on Thursday 4th March 22:02

That is precisely why it IS deductible.

Of course advertising is allowable.

I think you need to do a bit of reading up on how accounts are put together for a small business - or speak to an accountant.

[Frankeh]

I think I do... :/

[miniman]

Frankeh said:

The application I need is bandwidth

Sorry but I'm just not seeing how £20/month is going to get you any sensible amount of bandwidth for a server.

[jon-]

miniman said:

Frankeh said:

The application I need is bandwidth

Sorry but I'm just not seeing how £20/month is going to get you any sensible amount of bandwidth for a server.

There's plenty of hosts that offer stupid bandwidth limits for pounds a month. Whether they'll let you transfer that is another matter!

[jon-]

Frankeh said:

I'm thinking of starting a web business. Details are thin at the moment but I know I will need the following to run the business effectively:

A dedicated server. Roughly £60 a month.
An internet connection and phone line. About £20 a month.
Paypal fees.


Are any of those tax deductible?
Is there an explanation somewhere of what is/isn't tax deductible?

Thanks in advance.

Edited by Frankeh on Thursday 4th March 17:04

I've been through where you are now a few times, so anything specific feel free to PM me. Assuming this is a business on the side of PAYE, and the turn over will be relatively low it can be quite cost effective to run as a sole trader (where you're only taxed on profits) and if you're already in IT you can potentially put through some of your usual IT upgrades against the business.

[miniman]

jon- said:

miniman said:

Frankeh said:

The application I need is bandwidth

Sorry but I'm just not seeing how £20/month is going to get you any sensible amount of bandwidth for a server.

There's plenty of hosts that offer stupid bandwidth limits for pounds a month. Whether they'll let you transfer that is another matter!

I should probably have said "resilient, reliable bandwidth".

[Eric Mc]

jon- said:

Frankeh said:

I'm thinking of starting a web business. Details are thin at the moment but I know I will need the following to run the business effectively:

A dedicated server. Roughly £60 a month.
An internet connection and phone line. About £20 a month.
Paypal fees.


Are any of those tax deductible?
Is there an explanation somewhere of what is/isn't tax deductible?

Thanks in advance.

Edited by Frankeh on Thursday 4th March 17:04

I've been through where you are now a few times, so anything specific feel free to PM me. Assuming this is a business on the side of PAYE, and the turn over will be relatively low it can be quite cost effective to run as a sole trader (where you're only taxed on profits) and if you're already in IT you can potentially put through some of your usual IT upgrades against the business.

And if you make initial trading losses (which you might very well do - especially if you have large expenditure on capital equipment and claim the 100% Annual Investment Allowance - you could very well be able to claim back some tax already paid under PAYE.

[Frankeh]

miniman said:

Frankeh said:

The application I need is bandwidth

Sorry but I'm just not seeing how £20/month is going to get you any sensible amount of bandwidth for a server.

Yeah, well I'm discussing that at the moment with some hosts. There are a few UK based server providers (Not UK based with german datacenters. UK based with UK datacenters) who are offering st servers but 100mbps with unlimited bandwidth.

I'm trying to get them to tell me if that's burst or not though and if it's 100/100. Getting information out of these sales teams isn't easy.

If worst comes to worst I'll just actually buy bandwidth. At least then it's guaranteed. I can afford it if needs be.

[jon-]

Frankeh said:

miniman said:

Frankeh said:

The application I need is bandwidth

Sorry but I'm just not seeing how £20/month is going to get you any sensible amount of bandwidth for a server.

Yeah, well I'm discussing that at the moment with some hosts. There are a few UK based server providers (Not UK based with german datacenters. UK based with UK datacenters) who are offering st servers but 100mbps with unlimited bandwidth.

I'm trying to get them to tell me if that's burst or not though and if it's 100/100. Getting information out of these sales teams isn't easy.

If worst comes to worst I'll just actually buy bandwidth. At least then it's guaranteed. I can afford it if needs be.

Speak to Jamie at register1.net, he's a member here. The base spec dedicated server is £49/month, and you get a rather generous 2TB Per Month over a 100Mbit Port.

http://register1.net/servers.php

Top service, silly price.

[Frankeh]

jon- said:

Frankeh said:

miniman said:

Frankeh said:

The application I need is bandwidth

Sorry but I'm just not seeing how £20/month is going to get you any sensible amount of bandwidth for a server.

Yeah, well I'm discussing that at the moment with some hosts. There are a few UK based server providers (Not UK based with german datacenters. UK based with UK datacenters) who are offering st servers but 100mbps with unlimited bandwidth.

I'm trying to get them to tell me if that's burst or not though and if it's 100/100. Getting information out of these sales teams isn't easy.

If worst comes to worst I'll just actually buy bandwidth. At least then it's guaranteed. I can afford it if needs be.

Speak to Jamie at register1.net, he's a member here. The base spec dedicated server is £49/month, and you get a rather generous 2TB Per Month over a 100Mbit Port.

http://register1.net/servers.php

Top service, silly price.

Cheers man. If it's a guaranteed 100mbps then that's really good. Need to do some sums to check that 2TB is enough bandwidth. It seems like it's 8p/month for an extra GB though. That's really competitive.

[skwdenyer]

jon- said:

Frankeh said:

miniman said:

Frankeh said:

The application I need is bandwidth

Sorry but I'm just not seeing how £20/month is going to get you any sensible amount of bandwidth for a server.

Yeah, well I'm discussing that at the moment with some hosts. There are a few UK based server providers (Not UK based with german datacenters. UK based with UK datacenters) who are offering st servers but 100mbps with unlimited bandwidth.

I'm trying to get them to tell me if that's burst or not though and if it's 100/100. Getting information out of these sales teams isn't easy.

If worst comes to worst I'll just actually buy bandwidth. At least then it's guaranteed. I can afford it if needs be.

Speak to Jamie at register1.net, he's a member here. The base spec dedicated server is £49/month, and you get a rather generous 2TB Per Month over a 100Mbit Port.

http://register1.net/servers.php

Top service, silly price.

In fairness, Jamie's prices should be clarified slightly: £49/month is if paid up-front for a year, and is subject to VAT on top. For a new start-up, both of those facts make a bit of a difference

£49/month buys quite a lot of servers right now.

[rhinochopig]

Eric Mc said:

Frankeh said:

I'm not, IT is what I do.
The application I need is bandwidth intensive, not hardware intensive, hence the low cost server. Most of the costs will be incurred by bandwidth charges.
That and advertising. But it's quite a niche and the keywords dont cost much and have low search volume.

Is advertising tax deductible? Im guessing not since it's directly generating sales.

Edited by Frankeh on Thursday 4th March 22:02

That is precisely why it IS deductible.

Of course advertising is allowable.

I think you need to do a bit of reading up on how accounts are put together for a small business - or speak to an accountant.

How tax deductible is a stickered up (company logos) track car. I ask because the chap who bought my westy was putting it through his business as an advertising expense? Is this feasible?

[skwdenyer]

rhinochopig said:

Eric Mc said:

Frankeh said:

I'm not, IT is what I do.
The application I need is bandwidth intensive, not hardware intensive, hence the low cost server. Most of the costs will be incurred by bandwidth charges.
That and advertising. But it's quite a niche and the keywords dont cost much and have low search volume.

Is advertising tax deductible? Im guessing not since it's directly generating sales.

Edited by Frankeh on Thursday 4th March 22:02

That is precisely why it IS deductible.

Of course advertising is allowable.

I think you need to do a bit of reading up on how accounts are put together for a small business - or speak to an accountant.

How tax deductible is a stickered up (company logos) track car. I ask because the chap who bought my westy was putting it through his business as an advertising expense? Is this feasible?

Eric will be along in a moment to tell you that "there be dragons" and why

[jon-]

rhinochopig said:

Eric Mc said:

Frankeh said:

I'm not, IT is what I do.
The application I need is bandwidth intensive, not hardware intensive, hence the low cost server. Most of the costs will be incurred by bandwidth charges.
That and advertising. But it's quite a niche and the keywords dont cost much and have low search volume.

Is advertising tax deductible? Im guessing not since it's directly generating sales.

Edited by Frankeh on Thursday 4th March 22:02

That is precisely why it IS deductible.

Of course advertising is allowable.

I think you need to do a bit of reading up on how accounts are put together for a small business - or speak to an accountant.

How tax deductible is a stickered up (company logos) track car. I ask because the chap who bought my westy was putting it through his business as an advertising expense? Is this feasible?

I'm miss Erics doom and gloom, this should spark some

[Eric Mc]

It's not an altogether gloomy and doomy situation -

If the advertising and decals etc are on someone else's car - someone with absolutely no involvement in your business, then the expenditure on such advertising is totally allowable.

The problem is when the advertising is for a hobby or enterprise in which a director, employee or other connected person is involved in.
The basic rule would be thatb the expenditure, if claimed, IS allowable, but the individual could be liable to an Income Tax Benefit in Kind charge.

Edited by Eric Mc on Sunday 7th March 09:35