Claiming business expenses for work clothes

There are specific rules around claiming for work clothes as a tax-deductible expense. Any clothes which you could use for ‘everyday’ or ‘personal’ use are not an allowable expense.

Uniform

If you wear a uniform for work purposes for example you’re in the beauty industry and wear a uniform for hygiene reasons then this would be classed as a tax-deductible expense. Work wear which has your logo displayed can also be claimed against your tax as this is classed as advertising your business.

Protective Clothing

In some industries it may be essential to wear protective clothing such as a hard hat, safety goggles or safety boots for instance. The cost of these items would be allowable.

Costumes

If you work in theatre production for example then the costume’s which are worn by the actors would be tax deductible. This is also applicable for other industries such as entertainment.

Taxable Benefit

Any clothing provided to your staff, and cleaning or repair bills which are incurred are reportable on a P11D every year and may be subject to tax and NI.  This includes protective clothing as well as a uniform.

If you’re not sure about what is classed as a tax-deductible expense, always seek advice from your bookkeeper. If you make a claim which isn’t eligible for tax deduction you could be fined. You also don’t want to be missing out on vital expenses which you’re not aware of either. It’s always best to ask the question first for reassurance.

Clothing if you are a Sole Trader

The same rules apply as set out above.  Clothing which is not classed as protective, is not a uniform and is without a company logo is not a business expense.

Should I have a business bank account?

This is a question I get asked a lot and the answer is always yes! Here’s why!

 By law as a sole trader you don’t have to have a business bank account as your finances belong to you. If you’re a limited company, then by law you must have a business bank account as the money belongs to the business and not yourself. Therefore, you must keep personal and business finances separate.

 The good thing about keeping your business and personal finances separate means there is no confusion when it comes to your spending. Everything in your business account is strictly for business and everything in your personal account is for personal use. This makes it much easier to reconcile your accounts. Whether you’re doing your bookkeeping yourself or you have a bookkeeper looking after your finances it will mean much less work for you keeping it all separate.

 You may also find that your bank’s terms and conditions specify that your personal account must not be used for business use. So, make sure you check as they have the right to close your account at any time and without notice if they think you are in breach of their terms and conditions.

 By having a business account for your business, it means you will build a credit rating for the business. This will come in handy if you need financial support further down the line or require grants or investments.

 To open a business account your bank may charge you fees, but they should be very minimal. Make sure you shop around for the best rates. It’s worth paying the small fee to keep your personal and business finances separate and it also shows your clients that you are professional and reputable by having a dedicated business account.

 Making the right choices when it comes to your business finances can make a huge difference to your business success.

Why bookkeeping isn’t just data entry

As a bookkeeper I hear people assuming that my job just involves data entry. This is simply because people don’t necessarily understand what bookkeeping is. In this blog it’s my aim to clarify that bookkeeping is much more than just entering data.

A bookkeeper plays an important part in every business. Not only is it a legal requirement for every business to keep financial records but it’s essential to ensure you keep your cash flow nice and healthy and that your business is heading towards success.

Bookkeeping may be a job which you think you can manage yourself and that may be true to begin with, but it will soon become apparent that there are areas of your business that require your attention more than the accounts. When this happens it’s important to seek professional assistance as your growing business can soon become out of control if you’ve not got the right processes in place.

At Cactus Bookkeeping we help businesses to streamline their bookkeeping, making it more accurate, which then helps you become more efficient as a business owner. We will go above and beyond what you did to manage your books. By this we mean we use the data we have to do cash flow forecasting for your business and produce insightful reports. Without this information, you can’t make important business decisions, and you will never really know your true financial position. This information, we can review together, and we can help you to understand what it means for your business and its future success.

We offer software training and support, so if you do want to do the bookkeeping yourself you will be able to understand exactly what you are doing and what software is right for your business.

We also help our clients to save money by reviewing their business transactions. We can ensure you’re not paying for software you don’t use, subscribed to things you don’t get the most out of and make suggestions to change providers. We can also make sure you have agreements in place with suppliers so you’re getting the best discount possible to make your business more profitable.

 What else can we do for your business?

If you have employees we also offer a payroll service. You no longer need to worry about deadlines and changing legislation as we’re there to make sure you’re compliant. We will keep your employees nice and happy by paying them on time every time. You can find out more about our Payroll services here.

Are you a VAT registered business? We can help you to set budgets in order for you to keep on top of your VAT bill, providing you with monthly updates on your VAT liability. We will prepare and file your VAT return and keep you in the loop when it comes to any payment deadlines. This takes the stress away from you worrying about all the various different deadlines you have to meet with HMRC.

>>>find out more https://www.cactusbookkeeping.uk/vat/

So you see, a bookkeeper’s job is far more than just data entry. If your business is in need of more than just data entry to stay in control and get a better insight into the direction your business is heading then reach out today and book a discovery call.

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