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Can I get any money back on purchases made whilst freelancing?

Discussion in 'General Forum' started by stevensunsunsun, Mar 29, 2010.

  1. stevensunsunsun

    stevensunsunsun New Member

    Hi there,

    Sorry if this has been covered before, but I'm not too sure what to look for...

    I'm in full-time employment, and registered self-employed as I occasionally do freelance work.

    I don't make a lot of money, and as part of my freelance work I had to buy a larger HD for my home computer and image credits.... does anyone know if any of the money I have paid is returnable when I pay my tax later this year? Like the VAT on the image credits for example?

    Thank in advance for any tips... or links to where I can find out more!
     
  2. Things like equipment, software, travel etc can sometimes be included as expenses and therefore not applicable to be taxed, as they are required to do do your job - something you would declare on your Tax Return.

    With regards to VAT I'm not sure of the whole in and outs, but if you are registered for VAT then yea, you would claim VAT back on purchases but still declare VAT charged to customers.
     
  3. stevensunsunsun

    stevensunsunsun New Member

    Hi there. Thanks for the reply. I'm not registered for VAT, but will look at my tax return about my expenses then.
     
  4. Hartley

    Hartley New Member

    Basically you offset (allowable) expenses against the tax you pay.

    So if you make £1000 profit but had to spend £200 on allowable expenses to create that profit, you will only have to pay tax on £800 of the profits.

    Not all expenses are allowable, but there's more here HM Revenue & Customs: Tax allowances and reliefs if you're self-employed but business equipment is fine.

    You can also voluntarily register for VAT too. Normally you're not obliged to do so until you hit a certain threshold, but sometimes it makes sense to do so if you buy in lots of things whereby you could claim VAT back each quarter for instance. It wouldn't be so beneficial if your clients weren't VAT registered however, as they would need to pay 17.5% on your bill that they couldn't claim back of course.
     
  5. stevensunsunsun

    stevensunsunsun New Member

    Hi there,

    Just wanted to say thank you for your post... that's exactly what I needed to know. I'm guessing that I give that info on the tax forms when they send them to me...?

    Thanks again,

    Steven
     

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