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Online Trader Tax Explained guide image

Online Trader Tax Explained

Tax Return guide for online traders

We can prepare your Tax Return online for just £130

If you are a self-employed Online Trader you will need to complete a tax return so that you can declare your earnings to HMRC and pay any appropriate tax. You should keep records of all your earnings. There are a number of people that end up paying more tax than necessary, either because they haven’t recorded evidence of their costs or they don’t realise what expenses and allowances they can claim. All self employed people are allowed to claim tax allowable expenses so it is important you get into a routine of recording your income and expenses on a regular basis if possible. We have listed below the most common expenses which can save you tax.

Basically any expenses that you have incurred which are wholly and exclusively for your work are tax deductable.

  • Purchase of stock for resale
  • Postage and Carriage
  • Printing, Stationery and Packaging
  • Insurance
  • Internet connection
  • Auction management software fees such as Auctiva
  • Computer consumables such as ink and toner cartridges
  • Telephone – Landline and Mobile business use
  • Ebay and Paypal fees
  • Advertising
  • Use of Home as Office and/or workshop (read notes below)
  • Wages (read notes below)
  • Accountancy fees
  • Fares and travelling for sourcing goods for resale etc
  • Bank charges and interest on business accounts
  • Motor expenses for collecting and delivering goods for resale, etc (read notes below)
    • Fuel
    • Repairs and maintenance
    • Road tax, insurance and MOT
    • Cleaning
    • Parking and Tolls

Please note: If you use your vehicle for your own personal use then you need to factor this in when any expenses are claimed. For example if you calculate that you use your vehicle 20% of the time for personal or family use, then you would need to reduce any relevant vehicle running expenses by 20%.

An alternative to claiming the vehicle running costs is the HMRC’s Fixed Scale Mileage Rate which is currently 45p per mile for the first 10,000 and 25p thereafter. This includes a depreciation allowance (capital allowance) for the vehicle but does not include interest on any loan to purchases the vehicle. This can be claimed in addition to the mileage allowance

Capital Allowances

Capital Allowances can be claimed on assets used for your business and work, such as a car, van, truck or plant & equipment. You can claim an allowance of up to 100% in the year of purchase on certain items although cars are restricted to 18% per annum in most cases. Also assets you owned before you started the business may also be claimed if you use them now for your business.

Notes On Expenses

Use of Home

If you work from home, you will be able to put through a portion of the running costs of your home. It could include household bills such as gas, electricity, telephone, broadband, rent, council tax, mortgage interest, insurance, etc.

Family Wages

The rules regarding wages paid to family members have tightened. You may still pay family members wages, but they must actually be doing some work for the business and their wages be physically paid – ie HMRC will want to see a bank payment or receipt of cash paid to them. Furthermore, you should still consider national minimum wage rules, young workers regulations, and tax and national insurance implications etc.

Taxeezy Online Tax Return Service

Completing your Tax Return correctly, particularly when non-resident, is not an easy task and also can be very time consuming. For only £130 we can complete and file your Tax Return for you and ensure you claim all the allowable expenses and reliefs you are entitled to (Tax Treaty Claims and Capital Gains are subject to a £25 surcharge), saving you tax. Simply provide us with the information we ask for then leave the rest to us.

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