Foreign and welcome to the Pat Accounting Podcast with me, your host, Vicki Clark.

I'm going to help you get to grips with your finances, save you lots of money, and take the stress out of doing your tax return.

So let's get going.

We're going to go through expenses this week and look at what you can claim, what you can't claim.

Discuss a couple of things that you can claim in certain scenarios, if you like.

So because we know that we get a lot of questions in the groups of is possible?

Is that possible?

So this week is going to be quite a good one, I think.

Maybe we'll say what is possible?

Because normally we're a bit doom and gloom and say, no, you can't have that, you can't have this, you can't have that.

So maybe let's tell people what they can have.

We aren't going to discuss chiropractors and massages and gyms and health and glasses, because I feel like we've done that to the dying death.

And if you want to know about those, watch our previous podcast maybe a couple of weeks ago, where we chatted about that.

So just yet we're not going to discuss that.

But what we shall discuss is good things that you can claim for.

What do you want to start with?

Should we go for the pillow?

Can you claim for Manjaro fat jab pens?

I'm going to go with new.

That's a whole new topic in itself and I feel that's very controversial.

So maybe we'll not go down that about the seven pick pens.

But yes, we're not going to go into that.

What about should we start with utilities?

Because I feel like that's quite an important one and we do see a lot of questions on all the other groups about, you know, what can I put through as my utilities?

Some accountants only put the standard rate through.

It's £312.

And they don't bother sort of doing anything above and beyond that.

They just say 312 pounds.

And that is where we differ because we have gone above and beyond to get the most for you because of the industry.

And that, I guess, is a perk of having someone like the pet accountant rather than your local accountant, because they don't really understand what it is that you do and the impact of what it is that you do.

So we have the utilities calculator, which you can get on the store, which will take into account things like your electric, your gas, your water, your broadband, your mortgage interest or rent, and we're even updated and it does repairs as well.

Do you want to talk about the repair side of it?

Yeah.

So basically, depending on the house itself, it's split into two.

So if, if you've got an area like a separate grooming room in the garden, for argument's sake, then you can claim a bigger percentage of the repairs for the grooming, the separate area for business.

But if you've got a, a room inside the house, then you can claim for a percentage of the repair that would involve either around that work area or as the house as a whole.

So if you think about it this, you wouldn't be able to claim for a repair in a leak in a room that's three, you know, that's on the other side of the house, for argument's sake.

But if you had to replace the roof on your house or the guttering that something that does affect the rooms below it, the working space, then this calculator would allow a percentage of that repair cost to be included as a business expense.

Because in theory, you're repairing part of your working environment.

And so the calculator splits that into two so that it knows whether or not it's in the house as a whole or whether it's in your outside working space in the garden where you've got a dedicated groom pod.

And like I said, it works out a larger percentage if it's a dedicated workspace.

So that's something that wasn't in our last one that we've introduced into this one, so that you don't miss out on those, on that allowance, basically.

And you've got to think about it.

If you, if you work from in the house and you've got a home office, for argument's sake, because that may be the case of like dog walkers, borders breeders, they may have a dedicated space in the house, like a home office.

Let's start thinking about that home office.

You're going to need paint on the wall so you can repaint your office and include that as an expense.

You may need to replace the blinds in the room.

Now, I said replace, not buy brand, like not buy new to start with.

So if you're replacing, we can include those as a cost.

You may need some furniture in there, you may need a new desk, you may need a new chair.

You know, there will be things that you need for storage equipment.

So they could be shelves, they could be bookcases, all these type of things.

If there's a business element to them, then there's the potential to include part of those costs in with your accounts.

So the use of home isn't just the space it occupies, it could include furnishings within that space as long as there's a business element to them as well.

And we're talking like a massive gap.

Like we've had people where their previous account was only included £312 and then we've done their accounts and use the utilities calculator and it's come out with like 1400 pounds.

So that massive difference will make a massive impact on your tax bill, which is why we do harp on about it quite a bit, because it is such a good tool and we know from experience that not everyone's using or utilizing the use of home side of things because there's stuff like council tax, the mortgage, rent or interest.

Mortgage, rent, rent or mortgage interest that people don't include.

So that's, that's a quite important one there.

With regards to the mortgage interest.

Yes.

Not your mortgage payments.

A lot put.

Yeah.

So if, if you're a home owner, you could only claim the mortgage interest for that year, whereas if you rent the property, you can actually include the rent as part of the calculation.

So there's a big difference there.

So with regards to your mortgage, if you are repaying a mortgage, it's not the whole value of the repayments you can put through.

So you need to go to your mortgage provider to get a statement that shows what they've charged you in interest for the year and that's the figure that you use in the calculation.

So yes, go and check out the utilities calculator.

It will save you an absolute fortune.

It is a one off purchase, it's only 20 odd quid.

It's not going to break the bank.

It's a business expense and I guarantee you will save you money.

Everyone that's used it has saved hundreds of pounds off their tax bill.

So please, please, please utilize it.

We do it to help you.

So please go and check them out if you haven't already.

Another thing, I' seen this on our past banner, which I think is an apt one to talk about.

Garden pods, sheds are not an allowable expense.

And again, it's something we see time and time again on the different Facebook groups.

On our Facebook group, you know, can I claim for my wet pet pod?

Can I claim for my shed or whatever other structure that you've got in there?

And unfortunately these are not allowable.

But, but I liked your analogy.

If, if you picked it up and shook it, whatever falls out is allowable.

So then it depends how much you shake it because surely the wind does fall out.

But yeah, you know, being sensible about it, if you shake it and it falls out, you can have it.

What we're talking about there is like laminate flooring.

It would be an allowable expense.

But the important thing is when you buy these, certainly around the wet pet pod side, get a breakdown on the invoice things that were included on there.

Just because the structure isn't allowable, it doesn't mean that some of the things that they've included in that invoice isn't.

So for argument's sake, we see a lot of heating systems that have been included, we see the bathing baths, we see tables.

There are things in that garden room or the wet ped pot itself that if it's itemized on the invoice is an allowable expense.

So get it itemized and then we can pick what we can claim rather than them giving you one fixed figure where it's impossible to separate those costs out and then it's all disallowed because you can't say how much you've paid for some of the allowable items.

So that's, that's really key when it comes to building something in the garden or buying something off of a manufacturer that's going to deliver it ready made.

And the key with these here is structures, buildings and structures is not an allowable expense unless it's on commercial properties, in which case you can claim for, or you can claim an allowance against what you've paid for it spread across 33.3 years.

But like I said, that's only if it's on commercial land.

Now a lot of these things are in your garden at home, so it's on domestic land.

So even that 33.3 years allowance wouldn't be available to yourselves.

So that's, that's really important when you look at these investments because yes, it's nice being able to work from home, but you may have that initial outlay of this building to start with that isn't an allowable expense.

So you would have to sacrifice the tax on it.

And you got to think, well, why wouldn't it be an allowable expense?

And when you stop trading as a business, these sheds, these structures are fairly permanent.

A lot of them aren't able to move.

And when we say movable, usually they have wheels.

If they haven't got wheels, it's not really a movable structure.

Could you put your shed on wheels?

Yeah, the HMLC is clocked onto that because they found that the dog Groom.

Was going up in.

Right, I'm just going to crane this up with the wheels on it.

So HMRC's rule around that is that it must.

It not only does it have to have the intention to move, it must be moved from site to site in the course of your work.

Which is why a builders will have porter cabins when they're on site, because they use them for the planning offices, the toilets and the facilities.

They are moved from site to site as part of the build, as the builds move on and get completed.

So they are allowable, but they are one of the only structures that isn't allowable, which is usually a builder's cabin.

But anything else, it's not allowable unless it meets the criteria for structures and buildings allowance within 33.3 years on commercial premises.

So please, please get itemized in this.

Basically what we say is anything from the plasterboard in wood, so, so once it's been skimmed and plastered, any paint that you buy, anything that needs to go up on the walls, any, any fixtures and fittings that go in it, they would all be allowable.

But you need separate invoices for them or for them to be detailed on the invoice with a separate price against them.

So you know how much you paid.

For them and they should give you a nice bill.

Really.

I don't have wet pet pod.

Do they wet?

I've seen a couple with the wet pet pod and the way that they've done it previously is they give you one lump sum and sometimes they will say if you've picked extras that you want in addition to what their offer was, they'll then list those for you.

But because of the other items are bundled in as a, as a one off payment, then you lose the ability to claim those as the allowable expense.

Now the reason why people do that, or manufacturers do that is because they're hiding the costs of certain things in into your price.

And if you don't know the price of the things that you're paying for, the manufacturer can make a little bit more profit on there.

So by asking for an itemized bill, you might find that you're overpaying something.

You might just say, you know what, don't put that in.

I'm going to source that myself.

Yeah, actually, save yourself some money.

Helen's put, can I replace my Astroturf as its sole use for my business?

Okay, so the Astroturf is at home.

And, and that's one of the things that we need to have a look at with this, is Whilst you use your home for business use, ultimately your home and your garden is still a domestic dwelling and used for home purposes.

The initial putting down of brand new Astroturf when it never was there existing is not an allowable expense.

However, if you have to repair or maintain the Astroturf, you can put part of that through the business based on your percentage of your use of home as a repair to the building.

Which is put that on the.

The utilities calculator.

Yeah, that would work on utilities calculator because it looks at the percentage that you'll use at our house.

So there we go, another perk of utilities calculator.

Lawrence, thank you for this.

It's good to learn the differences as I run a home boarding in my home but also have a commercial property for daycare.

So again, yeah, very different.

And again, the home boarding for the utilities calculator for home boarders and home groomers would honestly save you hundreds of pounds on your tax.

Not so much for dog trainers or dog walkers because you don't spend that much time at home.

Um, we would normally put the flat rate through anyway.

Um, so don't waste your money buying the utilities calculator because it's not going to come out of any more than the £312 anyway.

Um, but if you are a home boarder and a home groomer, then definitely it'll be worth purchasing.

And just as a complete side note that we forgot about the other day, um, we read that there was some new guidance from HMRC with regards to dog breeders and pet sitting sellers and waste management companies that they have to register for tax.

So register of HMRC before you can get a license to breed or sell pets or do the waste management.

So if you are a new dog breeder or you're thinking of breeding dogs or selling pets, then you must, must, must register with HMRC before you can get that license.

So that is some new influence coming from HMRC which is non surprising really.

Consider the amount of letters that have gone out to dog breeders who haven't declared their tax.

Because we had probably over 100 phone calls from people who've had letters in the post from HMRC basically saying we know you've sold dogs and you've not declared it on your tax return.

So new legislation that has come out is basically saying that dog breeders must register with HMRC before they can breed.

So just a little bit of tidbit of information there for you which you know, your local accountant wouldn't know because they wouldn't be listening to It.

But there you go.

If you're a dog breeder, then make sure you do that before you do anything.

Another one.

How about maintaining the grass after the rabbits, guinea pigs destroy the grass.

So if you're a.

I'm assuming a rabbit guinea pig border.

Yeah.

So there's two ways that you could potentially look at that.

Because the rabbits and guinea pigs eat grass as a staple food diet to start with.

Are you replenishing the food?

In which case you would buy the grass seed just to put down to regrow the grass.

Would that be allowable?

Or if it's a case of that you're having to repair the grass in its entirety because they have destroyed it.

I would then look at the repairs and maintenance side of things and then put that into the cap, the utilities calculator on that side.

So again, it really depends of how you want to look at the grass seed to start with.

And I've.

I've actually seen that some, some people that look after guinea pigs and rabbits actually grow grass in trays that they then pull out as strips of.

Of grass that they put down for the rabbits and the guinea pigs to prevent them from eating the other grass.

That's actually already taken with the root systems and they use a hydroponic system which is all grown in water and then just literally pulled out of its tray, dumped in with the.

The rabbits and the guinea pigs and then restarted again for a couple of weeks time and that cycle continues with the.

With the renewable food.

How do you know this information?

I feel like you need to get.

Out good at my job.

Vic.

Hydra.

What food grass.

What if.

Where to find this?

I don't understand where Lee finds half this.

I was a TikTok just like.

That's a good one.

I don't even know what he said.

Helen's put.

That's good news about unlicensed breeding.

Yeah.

I think it's partially to crack down on that and obviously to stop people breeding and making a fortune off the dogs and then not declaring it, which we know loads of people do.

Hydroponics.

That's the word.

There we go.

Never heard of it before.

But this is why I have Lee, another question.

Having my floor done at my commercial daycare, squeezing poly floor fitted.

Lee will know what that is.

Is this liable expense as it's at the daycare need as a current floor is broken places.

Yeah.

Rebecca.

This is a commercial premises, which is completely different to having something at home and therefore that would be an allowable expense.

And these are more of a repair and maintenance to your existing setup rather than having something installed brand new when the building's being built.

So that would be absolutely allowable.

There's no issues there with.

Well, I just saw this from Helen and then I was about to say, oh, cheers, Helen.

And then she went.

And then there was a second thought, I'll let you off.

I'll let you off, Helen.

It's fine.

I was going to say something else.

Oh, yes.

There was a question on the group recently about fencing.

Now we get a lot of questions, weirdly enough.

And we had a massive debate last year, didn't we, about a fence.

I mean that's.

I mean it lasted three days.

We were all arguing with each other about whether offense is an allowable expense.

So I think one of the questions online was is it someone had a cabin in their garden which had the clients had direct access through, but not through the house, but they needed to put a fence around it?

Possibly.

Would they.

Let me have a quick follow up, Emory.

It was that the.

They have a room in the garden that's accessed like the public streets, but the fence that's there existing is damaged and they would.

If one of the dogs escape, then they can get out underneath this fence.

So they want to replace the fence around the garden and the office area so that it becomes a secured area.

The news was or is the fence an allowable expense?

The exact.

Yeah, the go for I work from.

A cabin in my garden which is accessed from a public path rather than through my garden.

The path runs alongside my house and currently has bushes and trees and an old fence which separates it from my garden.

The fence isn't secure and I'm always concerned that if I get an escapee into the garden they can get out via the fence.

So I'm having the whole fence replaced.

Is this something I can claim for with a lovely diagram?

Yeah.

So the answer to that is it depends on whether or not it is a repair and replacement or if it's a renewal and an upgrade.

If it's a renewal in its entirety and is an upgrade on what is existing that is already there, that it's not allowable.

If it's a repair to the existing fence system and like or a like for like replacement, then you can potentially claim part of it based on the percentage of the use of home.

But if it is a upgrade and a complete replacement with an upgrade of what's there, then no, it's part of the house.

It will add value to the house when you come to sell the house.

So that's when you will ultimately get the money back because you're increasing the value of the house.

Now, as long as you don't claim 100% of business usage on any one aspect of the of the house when you're using it for business, you get primary residence relief on the.

So you don't pay taxes.

If you use the house and you declare that you've used the house, whether that be one room for a hundred percent of the time for business usage, you lose primary residence relief and you have to pay capital gains tax on the sale of the house.

There we go.

And that was the end.

It's been short and sweet today, ladies and gentlemen.

Which good.

A quick message from Hawley Hounds.

No, if we're doing your tax return, you do not need to purchase the utilities calculator because it is included in what we do.

So please, please, please don't waste your money again, if you are a client, we will use that automatically anyway, so you don't need to purchase it.

So good news for you.

And the way we do that is when we start your tax return, you'll get an email from us that basically asks you to fill in two questionnaires.

First questionnaire is about your use of home.

So you tell us what you've paid for certain things in the year and we basically ask you stage by stage questions of what do you pay for gas, what do you pay for electricity, what did you pay for rent or mortgage interest?

You fill that all in, we get all the answers.

And the second questionnaire is just about your worldly income because we need to know what we need to include on that self assessment.

So you just see, sometimes people forget.

That they've got five jobs.

Don't tell us.

Which is why we did the questionnaire.

What we're now seeing is obviously we, we run payroll as well for other accountants.

So other accountants outsource their payroll to us to run.

And what we had recently was one of those clients employees come to us and said, why have you got my tax wrong?

HMRC has sent me this letter saying I now need to pay more tax.

Surely it should have been done through the payroll.

Normally we don't engage directly with the employees, it's always with the employer.

And we had a quick look at the letter that was sent through and they hadn't declared that they had 1500 pounds in savings interest to HMRC.

So the payroll was run correctly and the tax reported correctly, but the employee had savings and an interest from savings that they didn't declare and HMRC knew about it.

So this task force that HMRC has spent all this money on recruiting, they are now starting to take effect and we are seeing people being contacted for even small amounts of tax.

Yeah, they're definitely going to be cracking down.

I think.

It's obviously in line with making Tax digital as well, which we always have a look to see if there's any updates and that there isn't really, apart from the.

They gave us dates of when we'd have to submit those quarterly submissions and basically you have a month after the end of the first quarter to submit, but you can adjust them if you get them wrong in future quarters, which I wouldn't advise.

I feel that's going to be quite.

Messy from looking at it.

And again, I think the issue that we've got at the moment is there's no guidance because I haven't shown us.

Like a form of what this actually looks like.

Yeah.

So what.

What's happening is that everybody's looking at the same sort of snippets of information they can from it.

And whilst they're saying that you can amend it by the looks of things, of what they want you to.

To.

To give over on those is in your first quarter, they're going to want from April to June or July, I think it is.

And then quarter they want from April to October, the same is including the same amount of information.

So.

But what that's doing is, is that if you did make a mistake in the previous quarter, it wouldn't automatically be corrected in the next submission because you're not sending them three months worth or four months worth, you're going to be sending them four months, then eight months, then 12 months.

Isn't that another way to say if you did your first quarter and then you did the next one and you.

You change the figures.

Yeah.

They're going to know you've changed the figures from your original quarterly submission.

That could raise a red flag.

Red flags, yes.

So rather than doing it every three months, they're including the previous one.

So if you then fiddled your figures, if you were dodgy and you fiddled it and they're like, hang on a minute, why is that different to what they originally submitted?

And there goes that little red flag.

So.

Yeah, and it just.

A lot more people are going to start getting caught out, certainly those that aren't declaring cash, because however you look at it, cash these days is no longer just cold, hard cash.

There is a record of that somewhere.

So if you're a dog groomer, and you take cash for argument's sake, and your sales drop because you've taken more cash and you only report your card sales.

And again, burger vans are exactly the same for this, you know, you've got to be so careful the moment that, that your card sales start to fluctuate because you take more of one than the other.

HMRC will compare year on year and they may want to know why your sales have jumped up and down.

But your purchases, because you don't make cash purchases, you're making purchases via your, your card, via your bank statements.

Why is your purchases and your expenses remaining the same but your income up and down like a yo yo.

And that is one.

And that's a red flag to us as well because again, we do your accounts.

We are looking to see whether or not the clients are being truthful in their affairs with us because our relationship with our clients work on the fact that you have to tell us the truth.

And in return we will tell you the truth in terms of, you know, the potential fines, the penalties, the consequences of it.

So, so that relationship is, is, is built on an understanding that, you know, if you, if you're coming to an accountant, you've disclose everything.

To that end, they, they can do things correctly because we may be able to tell you better ways of doing things that will save you tax legitimately rather than you committing tax evasion and then getting found out about it.

Because it's very difficult to come back once you commit tax evasion.

And if you have committed tax evasion and you then tell us in future years, well, I didn't tell you about my cash sales.

It puts us in a very, very difficult situation where we have to say, well look, unfortunately we can't act for you anymore or you either go back and correct the submission.

So you now tell HMRC those and pay the tax that is due and we carry on working together or we have to walk away because we, we can't knowingly go forward with that being, you know, in the background because we don't know whether the next tax return that we do is going to be accurate.

Yeah, we are there to help you as well.

Like we do get some people that genuinely like, haven't submitted attached to them for three years, not because they're trying to be dodgy, it's just they, you know, just didn't know what they were doing and you know, we can help you in those instances.

So it's just about being honest and trying to do things right.

But like Lee said, we, we do Get a few phone calls where people are clearly trying to be dodge and we just say, no, sorry, go and find someone else, because it's just not worth it.

On a separate note, when we're talking about expenses, if you haven't seen our lovely bookkeeping record keeping pack that we've relaunched the minute, just as a side note, I don't know if you can spot.

He's doing so well.

I was doing so well.

Sorry, babe.

This record keeping pack does actually give you a breakdown of the expenses and what you can include.

So again, if you're a paper and pen person and you, you know, you don't want the faff of using software and you don't need to use the software at the moment, then these record record keeping packs would give you the breakdown of what you need and what to include as well.

So there is that guidance.

It's like having me and Lee, but in paper form there with you.

So if you don't.

If you want one of these, we'll have them at Crufts, but you can also buy them from the store and get them posted to you because like we said, once they're gone, they're gone.

We've already got rid of one box, so there's only a couple boxes coming to Crufts.

So if you want one, then grab it.

Don't necessarily wait for Crufts because there may be none left and we're not good anymore.

When is the next tax submission due?

Is it July?

Uh, no, it.

So the end of the tax year is the 5th of April, Rebecca.

And then your tax return will be due from that point until next January, but your next payment on account will be July.

So that might be where you're getting confused.

So payments for account are January and July.

The end of the tax year is 5 April or 31 March, depending on your year end, and then You've got until the 31st of January to submit your tax return.

But that will differ if you're a limited company because it depends.

Year end is for your limited company.

So the tax due for a limited company is always nine months and one day after the year end for the limited, which could be any month of the year.

But another thing we notice with the make and tax digital, with the dates of the submissions, they're based off the 5th of April.

Yes.

What about people on the 31st of.

March of every single month?

Yeah.

So, okay, yeah, should have said everyone needs to be on the 5th of April and not given them the choice.

Yeah, I Don't know if you didn't see.

If you want to hear about making Tax Digital, we did a live on it a couple of weeks ago and basically the first people that need to worry about it is those that have got a turnover of 50 grand or more because you will have to go digital by next April.

So 50 grand is measured in this tax year.

So the ends in April.

If you've done over 50,000 in sales.

Not profit in sale.

No, sorry, profit.

No, it's sales.

It's turned up.

Sorry, yeah.

50 grand in sales in this tax year that's ending in April.

You will be subject to making those declarations from April of 2026.

So if you are a client of ours, when we're doing your 24, 25 tax return, if your turnover is 50 grand or more, you will be getting a little friendly reminder email from us just to say that you will have to go digital next year.

We'll be making a note on our systems and obviously if you're not on software at that point, you will expect a phone call from Tegan to talk you through the different options that are available.

It's not as scary as people think.

It's.

Yeah, it is a bit one of those where I think, oh, for God's sake.

But, you know, being on software is better, so it will help you in the long run.

It's just one of those that it's not going to be voluntary.

You have to do it.

Everybody as well that when Making Tax Digital submissions come in, I think it's fair to say that accountancy fees across the UK will change.

There's already talks about it in the accountants groups that me and Vicky are in, but because we don't know at the moment what form that these are going to look at and the work that's involved and how accurate they need to be, we can't say what that's going to do to fees in general.

But we.

We do know that regardless of who your accountant is, it is likely that you will see an increase.

Well, obviously we're in all the groups, the really exciting accountancy groups, Facebook and.

And Tick Tock and things like that.

And everyone's starting to talk about now about, you know, people putting their fees up and everyone's gone.

I mean, some of them are putting them up, extortionate amounts.

Like.

It's absolutely.

It's insane.

I don't know how they can give a figure when we don't know what we're doing, because we've not been.

We know, like what they want, we just don't know what format they want.

It is it just a quick five minute fill in the form.

But you know, if you've got a thousand clients and you have to do that every three months and you've only got a month to do it, that's a lot of time.

So it is, it is going to change the pricing structure and obviously we will give you guys that once we know a bit more information of how.

Come down to the client as well, in all honesty, because if doing their own bookkeeping, they're going to need to get that done by a certain time in order for us then to be able to pick that work up and submit it.

If, if they don't like software and they want to engage a bookkeeper or like the likes of us to do the bookkeeping up until that stage.

Again, there's work that's involved that we have to complete in that quarter, like we do with the VAT return, that has to be brought up to date before we can submit those figures.

Yeah, because it says that it has to be correct.

You figure have to be correct and up to date.

So again, that's putting more pressure on you guys to make sure that if you're doing your own bookkeeping that you are on top of it.

Whereas at the minute you can sort of do as and when there's no time pressure.

But you know, from next year there is going to be time pressure because you have to get it done within that time scale.

Yeah.

Quick question from Alison.

If you've made a loss, can you use this in future years, meaning it's allowed to be used the next time you're over your personal allowance, if that makes sense.

So Alison, with this one is key that the loss is used first before the personal allowance.

So what happens is, is that if you make a loss this year, you have to use the lost as its first available opportunity, which would generally be the following year.

You'd use the loss and then apply your your personal allowance, which is why having an accountant is key, because we wouldn't have claimed everything under the annual investment allowance or write down allowances for assets if we knew that you wasn't going to be making enough next year to have to use it.

So depending on how you've done your accounts, you might find that your loss is used up next year and you lose your personal allowance.

But the losses is always used before the personal allowance.

There we go.

Thank you, Alison.

Message from Ruth.

I heard something about quarterly reports.

Does this affect everyone Ag so traders in both tax brackets.

So, Ruth, basically making tax digital will come into play next April for those that have got a turnover of 50,000 or more, and that is sole traders.

Partnerships, limited companies are a later date.

We don't know that yet.

But if you're 50 grand in sales or more as a sole trader, then you will have to go digital as of next April.

And the quarterly reports, again, we don't really know the context of them other than you have to declare your income and new expenses, but we don't know and what format that they're going to want them in.

But you still have to do a tax return at the end of the year.

But then will that differ?

I don't know.

No, I don't think it does.

Because it's a consultant one, isn't it?

So.

And bear in mind that the tax return takes into account all of your, your worldly income, not just for your sole trade business, which is.

This is what it's reporting.

So it wouldn't surprise me if we go to a consolidated one that consolidates all the reports.

Yeah.

Give us the taxable profit that we then use in the self assessments to work out the tax.

Oh yeah.

Because at the end of the year you've got to do a financial statement.

So I'm guessing the figures from that financial statement will then have to go into the tax chain.

They think they would tell us information by now because we're in February, but hey ho, the thing to be careful.

There, Ruth, is that we're talking about turnover.

So you could have more than 50,000 pound turnover, but depending on your expenses, you could be a lower rate taxpayer.

You could be a higher rate taxpayer.

Turnover exceeds 50, then you will fall into the first round of people that needs to do the submissions and the following year that 50 has dropped to 30,000.

But if you're starting a brand new business, you are automatically included in this.

So if you are listening and you haven't started yet, once, once we get up and running for making tax digital, regardless of your turnover, you will be entered into that system.

Yeah.

And then I think at some point it will go from 20 grand and more.

I don't, I can't see them doing it.

For those that are earning under 20 grand personally, maybe in like years to come.

But they've got so many to roll out if.

Because if as you start business, your first year might be less than 20, but they're already automatically putting you in.

Oh yeah, good point.

Yeah.

Sneaky, sneaky message from our lovely payroll manager, Jodie who's watching this rather than working, talking about good digital and HMRC changes.

This also applies to payroll, specifically benefits in kind.

So again, if you're doing your own payroll, it might be something to consider getting an accountant to do it.

Like they said, we have accountants coming to us to do the payroll.

So again, something to consider moving forward if you are doing your own to maybe get someone else to do it so that you make sure that you are compliant with what you do.

Just so that everybody's aware, obviously what flashed up then is a benefiting kind.

Benefiting kind is the tax that you have to pay on a non cash benefit that's being provided to a director or employee.

Now that could take the form of a company car, it could be accommodation, it could be health or dental insurance.

It's the taxes that you have to pay on those.

Now the current system is that at the end of the tax year you do a P11D report that information to HMRC and then the company pays its national insurance contributions on it and the employee will have additional tax that they need to pay that's usually collected either via a change in the tax code or the HMRC send them a bill and they have to pay HMRC directly from next year.

The reporting of that benefit must be done monthly with the payroll and the employees will pay the tax as part of their pay slips.

So that that information and the payment is going to HMRC every month or every quarter rather than once at the end of the year.

So there's a big change in the way that benefiting kinds are reported and paid to hmrc.

Yeah, that doesn't get involved in payroll.

So I was looking at you, I'm like, oh, payroll.

It's not my fault here.

We sort of went off on a slight tangent.

Then we started talking about expenses and.

Then we went on a lot of expenses.

So in recent.

Have you got any weird and wonderful ones out of yours?

Isn't wonderful, but we get a lot of questions and we see a lot of clients try to claim for daily food.

Daily food and drink.

Oh yeah, that, that is a contentious one.

So here's the thing, right?

Bored and not so much borders, but.

But kind of.

Okay, so pet sitters, let's look at pet sitters.

HMRC's rules or general rules are that if you spend a night away from home, then you are able to claim for meals and drinks whilst you're away on business work.

So if you apply that rule to a pet sitter that goes and stays in a client's house, then in theory they should be able to buy food and drink whilst they're out staying at this person's house looking after the dog.

I feel like there's a bust coming.

The big butts.

Yes.

The rule is that in order for you to be able to claim food and drink, it has to be outside of your usual working practices.

So if you regularly stay at someone's house and look after a dog, that is your regular work, so doing it is not unregular and therefore the rule for food doesn't apply.

But hang on, but just playing devil's advocate, what happens if you're a dog?

So what was.

If your predominant business is dog walking and you do the occasional dog sit, but it's not for the same client.

Client is irrelevant for this.

If you offer that service that is part of your regular work, if you go away and do a training course and stay away at a hotel that is outside of your regular work and therefore the food and drink whilst you're at the hotel, including the accommodation, is an allowable expense, but general day to day food and drink is not an allowable expense.

However, if you go and have a business meeting with a potential client or supplier, your meal and only your meal, not theirs, not the drink, but your meal whilst you're at that meeting is an allowable business expense.

So again, it, it all comes down to what is regular, what is regular for you and usual for you.

If it's unusual, you can generally claim food and drink.

If you go to a dog sit but they don't have cooking facilities and you have to go out and buy.

Some food, that's if that, that doesn't change with what you're doing is regular or irregular.

I thought you said ages ago if you went to a dog sit and you didn't have the facilities to cook, like a microwave or oven and you had to do a one off purchase of food, you could claim that we.

Were looking at whether or not we could do that, but further guidance of HMRC and delving into the rules and looking at the questions that people have asked again in the other accountancy groups and the HMRC manuals, it all comes down to that rule about whether or not it is regular or irregular for the services.

Irregular because normally they'd have the facilities there to cooper surely if they don't.

Have facilities there to cook, your service didn't change.

All, all that changed.

There was what you expected when you arrived and it would.

You've got to think about it.

You know, you, if you didn't have the facilities at home for whatever reason, you didn't go shopping, your oven broke, you'd still have to go out and buy food or a takeaway.

That doesn't change.

I think stupid guidances then change their minds all the time, me add in.

But it, it stops the, the kind of abuse of the system as well, doesn't it?

Are you Alicia or McDonald's?

It's not really sure.

The guidance has changed.

Can I claim lunch if I'm doing full day stall?

So again, it depends if you're all day stall.

If you regularly do stalls, then no, you can't.

But if you're going to a trade show like we are into crafts, then whilst we're at crafts, because it's once a year, it's outside of our regular pattern, it's not at our regular place of work, it's several hours away.

Then the food and drink that we will consume whilst we're there as well as the accommodation is all allowable, but that's only because it's outside of our usual working pattern and location.

So it really depends, Helen, on if you regularly do this stall, then.

No, you can't.

If it's a one off then you can.

Tegan's put a good point in there.

If you go into Crufts, what can you claim for those going to Crufts?

And if you are going across, make sure you come and see us.

Hall 1, stand 58 which is in the entrance.

Come and see.

We might have some special offers on.

Obviously if you want to get your record keeping pack or if you just want to natter and have a little glass of fizz, we will have plenty there.

And again, this is, this is a weird one because you have to view it from the point of view of where you're traveling from.

Because we like, we'll be traveling down from Northumberland and Cumbria, which is several hours and Wales, so it's several hours away to get to crafts itself.

We're there for business purposes, so it ticks those boxes and therefore the food and drink, the accommodation, the travel is all an allowable expense.

Now the neck is in Birmingham.

If I lived in Birmingham, would I expect to claim the same expenses as somebody that's traveling down and having to have an overnight stay?

And the answer is no.

If you're living in Birmingham and you go into trusts crafts, you can claim the travel expenses to, to the location because it's work related.

I'm assuming that's if you go in there to look at suppliers and other bits and Pieces.

If you're going there personally to watch the dog shows with no business, you know, nothing to do with the business at all, then the crafts isn't an allowable expense.

So you have to be going there for a business reason.

Going down that route.

If Crufts is only half hour, an hour away from your place, from where you live, then it's.

It's unreasonable to assume that you would be able to claim the same amount of food and drink as somebody that's had to travel several hours with overnight stays because of how far it is and you can't go home.

Now, you might say, well, you know, I want to go there for a few days, so I'm going to.

I'm going to buy the accommodation.

But you only live half hour away.

Would that be reasonable?

And in the eyes of hmrc, would they say.

Say that is a reasonable and wholly and exclusively for business, or was there personal elements to that as well?

So it has to be treated on an individual, case by case basis.

Now, crafts is outside of the normal business, you know, realms when it comes to what would be classed as a normal business day.

So there is an argument that whilst you are there, you may be able to claim food and drink, but I think it all depends on how far you've traveled and how long you're staying.

Now, I've got Helen's, but she does different stalls over different months.

Not a regular slot.

Okay, so different stores, different months.

I would.

That's one of the ones where I think that I would include it with a little asterisk and a note in the accounts that says, if HMRC comes knocking, you have to be prepared to defend it.

And only because if it's not regular, is there enough information there and for us to claim that it's irregular and far away from home and therefore if it.

The thing is, if it's close to home, have you got the ability to nip out for lunch and nip home for lunch, in which case buying food there wouldn't be allowable anyway because you're too close to home.

Cool.

Pat has put, can I claim camping for my motorhome when I go across coming from Southampton.

Ooh.

Surely that's the same premise as if she wasn't in a camper van, she'd be going to a hotel.

The campervan fees, like the higher site.

Fees, and the only reason I go Ooh.

Is because I know that HMRC have taken against builders that are looking to buy caravans and trying to claim the caravans as an Allowable expense.

Well, that'd be good.

Can we get a motorhome and say we use it for crafts?

No, for homes.

So a convert.

So even if you convert a van with.

To sleeping facilities is then classed as a.

As a car rather than as a van.

So, Pat, I would personally say, because you're not buying the accommodation and you're there for several days, I wouldn't have an issue with putting that claim in as an allowable expense into the accounts because I believe that we would be able to justify it against the cost of accommodation whilst you were there.

This is much eco, isn't it?

Yeah.

I think if you'd have asked me, can I put my motorhome in the accounts?

It goes.

It for staying is, you know, when I go to see clients, rather than staying in their house, I stay in the motorhome.

My answer would be very different, but in terms of the.

Of the fee, the campsite fee, I would be confident that we could put that through and argue successfully.

HMRC challenged it.

Can we buy a pet accountant caravan and then say we're going to do the pet accountant on tour?

Just that for caravan.

No, because I couldn't get the pedican caravan to Miami.

Damn it.

I really fancy a little caravan pod thing.

If I stick the pet accountant on a sticker on it.

No.

Sometimes I do text in.

I'm like, I really want to buy this.

Can we put this through?

And he's like, no.

I'm like, damn it.

I have an obsession with pens.

I've got really nice pens.

I was like, surely that's business expense, because I need to write.

But no, doesn't allow it.

Doesn't allow me to buy nice things and put it through the business.

So there we go.

Right, we've been on nearly an hour and we have digressed slightly, but we have answered lots of questions, which is good.

It makes these lives much better for us if you bombard us with questions, because at least we know we're helping and it helps everyone else who's probably got the same question.

Sharon did have a question via the group about the wet pet pod.

It's not allowable.

Sharon, if you listen back to the beginning of this episode, then you'll understand why.

But basically, sorry, know, the wet pet pods, although they're aimed at groomers, the way that they advertise them, you can actually buy the pod without the stuff in it and it is just a glorified garden room.

And so, no, unfortunately not.

I will do a very quick way, a quick roundup of ways to save tax as a sole trader so that we can round up.

So if you're a higher rate taxpayer, start paying into a pension, extend your lower rate tax ban and save you an extra 20% on your taxes.

When it comes to your self assessment, even if you're a low rate taxpayer, still pay into a pension because HMRC will top that pension pot up for you by 20% as well as the tax relief once you get to a higher tax payer.

If you have family members over the age of 13 that don't have another job and you pay them pocket money to help in your business, get them on the payroll, start paying them a wage as long as it's less than 123 pounds a week.

You don't need to report that to HMRC but it can still go in as an allowable expense into your accounts, reducing the tax that you will pay, increasing your expenses.

That works for another family member as well.

So if your partner doesn't work and the key is they can't have a job.

So if they don't work and they've got their personal rate tax band and they do help you out with the business, pay them some money, make sure if it's, if it's more than 123 pound a week, get them onto a proper payroll.

Speaks to Jody, she will get a payroll set up.

You'll give them pay slips and all the rest of it and they are an allowable business expense.

They get the money tax free because it's less than their threshold and you can have up to 12 and a half thousand pounds as an expense against your business to lower your taxes as well.

The key with that is they have to be paid at a commercial rate that you would expect to have paid somebody that's not connected to you.

So you couldn't pay your 13 year old son 40 grand for the work van.

So it has to be a proper job within the business for, for, you know, for, for, for the going commercial rate for that job.

But that's completely allowable if you cycle anywhere for business.

I was saying that, waiting for you to not say that and I was like if it's bicycle, bicycle mileage K.

Bicycle mileage, 20 pence a mile.

Do you know how much they claim if they use a motorbike?

I found you that, yeah, motorbike rate, I don't know.

£25 for a motorbike if you use a motorbike.

So again there's no limits on those miles unlike there is with a car.

Where you can claim 45 pence per mile for a car if it's less than 10,000 miles and 25 pence a mile thereafter.

So if you are going to trade shows, if you are using the car to run drives anywhere.

Yeah.

Make sure you're recording that mileage.

So if you, if you're not claiming any fuel or anything to do with your car at the moment, but you are using it for business purposes, make sure you get an mileage in anything that you use outside of of the, like at home for like subscriptions.

Like Office based subscriptions like Microsoft Office.

If they're used for work purposes, then the subscription that you pay to Microsoft Office is an allowable expense.

So things like Canva and Zoom.

Yeah, yeah, absolutely.

Any of the dog.

Dog lead, they're like dog lead inquiry websites.

Like dad Arc.

Yeah, anything like that that you pay for to advertise your services.

Whether or not your local chip shop or bookstore charges you to put a little advert up in its window, that's on allowable business expense.

So make sure you're getting those in your accounts as well.

Any subscriptions to trade magazines.

So if you, if you're in the magazine.

Yeah.

So if anybody charges you for a magazine that enhances your knowledge, that gives you up to date information of what.

Yeah, brilliant ones.

Those subscriptions are an allowable business expense.

Dare I say it.

The little copycats.

Yeah, we've noticed that lately.

Suddenly come up with a tax and pricing calculator.

I wonder where they got that idea from.

I wonder.

Just trying to think of whether you throw me now.

Yeah, that's the end of my tirade of allowable expenses.

Throw them in there.

They got buddy kicked out of the group.

Little copycats, find your own ideas, stop copying ours.

There goes my little rant for the day.

Rabbit it on, Ellen.

We're not rabbiting on.

We're giving you valuable information like paper copycats.

What else was I gonna say?

Oh, damn it, I can't remember.

Oh, yes, our free agent course is, is literally like 50 there.

We're hoping to have that live by the end of next week so that we can put that on the store and it's basically going to give you loads of videos of how to do certain things.

So basically we've gone through all the questions that we get asked.

We've gone through all the questions that get asked on the group and we've done a video basically how to guide of how to use.

Oh, she said Rabbit is a subscription magazine.

Oh, I thought you were Telling us we're rabbiting on.

But yes, I've got to go.

Helen has things to do.

Yes.

So the free agent course, it will show you basically how to do all of the little things, you know, like creating an invoice, how you categorize things and all that sort of jazz.

So it'll be out hopefully for you guys to get by the end of next week, if we can get it done in time.

And also the Refer a friend scheme is going to be launched this week as well.

So if you do refer anyone to our lovely services and they sign up, then you will earn yourself a 50 pound Amazon gift card.

So whether you do one or 10, you will still get pound 50 for every person that you refer to us.

We've had a few people do it already and once they've made their first couple of payments to make sure that they don't do it just so you can get your gift card and then bugger off.

You will get the 50 pound per person that you refer to us and that's for clients and non clients.

Even if you don't use us for some reason and you do it yourself and you want to refer your friend, you'll still get that 50 pound.

That sounds mad, but honestly, we get people referring us even though they don't use us themselves.

So mind boggling.

But I'm thankful.

We're definitely thankful.

So yes, if you go on the website, you can fill in the form and let us know who you've referred.

Or is it who you've referred or who you've been referred by?

No, so it's the person that needs to refer the person.

So if you were going to refer me, you'd go on, complete the form, you give them my details and then we would reach out to that.

Right, there we go.

So there we go.

Just for a bit of clarification and you get yourself 50 quid.

Easiest 50 quid you've ever made.

And yeah, I think that's it.

This will be live on the podcast on Monday.

We are uploading them every Monday, so if you do follow us then please subscribe to the podcast so that you don't miss out on our lovely topics of the day and mindless ramblings of two accountants on a Wednesday.

On our Thursday, because we're day late, we start off so well, we've got to like the end of Feb, we've crumbled already.

But yes, we also will have Darren with us at Crufts on the Friday doing some filming and some videoing.

So if you are a client or if you're just someone that listens to the podcasts and you want to do a little video for us, then feel free to come and be on camera on the Friday.

And I know Clanger on Nicola.

Yesterday when we were chatting on the phone, she's like, oh, I'm gonna get my head.

And I was like, oh, good.

I said, because we've got a professional videotographer coming.

Yeah, we'll all be looking pristine.

Friday.

Look like tramps.

Thursday, Saturday, Sunday.

But if you do want to do this little testimonial, then feel free to put along on Friday and we'll get you on camera.

Other than that, I hope you all have a good week and we will catch you next week on Wednesday.

Hope.

Yes, we're both in.

I think so.

Oh, not me.

Why?

I'm new.

I'm at a client's on next Wednesday, so you're aware a client's.

Ah, forgot.

Yeah, usually go on a Tuesday but we swapped it to Wednesday this week, so.

Oh, right.

Well, do you know what?

I'll drag Abby or Lindsay or Tegan on and we'll have someone else's face on so you can, you can get a little mix of staff.

Right, we are rabbiting on now, so have a good week everyone.

I hope you've enjoyed it.

Any questions?

As you always use the group and if you want to become a client then please give us a ring or speak to Tegan and we'll have a chat with you.

Thanks for listening.

If you've enjoyed my podcast, don't forget to subscribe for me and if you want to speak to me, please visit my website@www.petaccountant.co.uk and if you'd like to join my Facebook group, which is full of like minded pet professionals, then search accounting for pet professionals in Facebook and I will see you there.