If you are a self employed electrician read on to see how you could almost certainly be owed an annual tax rebate.
Most of our clients are self employed tradespeople, and many are electrician self employed tax clients and we regularly see that once we take care of their annual tax return (which we do with zero upfront cost or charge), the tax that they have had deducted at source is far too much. And once we properly present this information to our counterparts at HMRC, they then see an automatic tax rebate within around four weeks.
How can this be the case?
Well, in theory it's simple. Most tradespeople will work on contracts under something called the CIS scheme (CONTRUCTION INDUSTRY SCHEME). This means that whenever they work on a contract or a site, the main contractor will deduct tax at source from their earnings. This is usually at a rate of 20% however sometimes it is 30%.
And once for an electrician self employed tax client their annual expenses allowances are calculated at the end of the tax year (this is what we do for you) which are all tax deductible, you would be astonished as to how much too much tax they have handed over. And here are a couple of tips. 1. We almost literally never see a new client who has properly assessed their own expenses. They are always far too low, meaning they are simply handing over their hard earned cash to the tax office for no reason. 2. If this money isn't claimed back in the correct format, then you will simply never see it again.
But don't panic, this is what we do for you. Simply go to the 'claim now' page of our website, quickly fill out the new client form and then relax. We will take it from there.
Types of expenses that can contribute to an electrician self employed tax rebate.
If you’re self-employed, your business will have various running costs. You can deduct some of these costs to work out your taxable profit as long as they’re allowable expenses.
ExampleYour turnover is £40,000, and you claim £10,000 in allowable expenses. You only pay tax on the remaining £30,000 - known as your taxable profit.
Allowable expenses do not include money taken from your business to pay for private purchases.
If you run your own limited company, you need to follow different rules. You can deduct any business costs from your profits before tax. You must report any item you make personal use of as a company benefit.
Costs you can claim as allowable expenses
These include:
- office costs, for example stationery or phone bills
- travel costs, for example fuel, parking, train or bus fares
- clothing expenses, for example uniforms
- staff costs, for example salaries or subcontractor costs
- things you buy to sell on, for example stock or raw materials
- financial costs, for example insurance or bank charges
- costs of your business premises, for example heating, lighting, business rates
- advertising or marketing, for example website costs
- training courses related to your business, for example refresher courses
You cannot claim expenses if you use your £1,000 tax-free ‘trading allowance’.
Contact the Self Assessment helpline if you’re not sure whether a business cost is an allowable expense.
Costs you can claim as capital allowances
If you use traditional accounting, claim capital allowances when you buy something you keep to use in your business, for example:
- equipment
- machinery
- business vehicles, for example cars, vans, lorries
You cannot claim capital allowances if you use your £1,000 tax-free ‘trading allowance’.
If you use cash basis
If you use cash basis accounting and buy a car for your business, you can claim this as a capital allowance. However, all other items you buy and keep for your business should be claimed as allowable expenses in the normal way.
If you use something for both business and personal reasons
You can only claim allowable expenses for the business costs.
ExampleYour mobile phone bills for the year total £200. Of this, you spend £130 on personal calls and £70 on business.
You can claim for £70 of business expenses.
If you work from home
You may be able to claim a proportion of your costs for things like:
- heating
- electricity
- Council Tax
- mortgage interest or rent
- internet and telephone use
You’ll need to find a reasonable method of dividing your costs, for example by the number of rooms you use for business or the amount of time you spend working from home.
ExampleYou have 4 rooms in your home, one of which you use only as an office.
Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).
If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7).
Simplified expenses
You can avoid using complex calculations to work out your business expenses by using simplified expenses. Simplified expenses are flat rates that can be used for:
- vehicles
- working from home
- living on your business premises
self employed tax rebate - HOW TO INCREASE BY THOUSANDS. (selfemployedtaxback.com)
CLAIM CIS TAX REFUND - How to get the maximum Tax Rebate (selfemployedtaxback.com)
self employed tax return - guidance - rebates of overpaid tax (selfemployedtaxback.com)
CIS tax rebate (selfemployedtaxback.com)
CIS tax return. Get it right and secure the maximum rebate. (selfemployedtaxback.com)