Self Assessment Tax Return - questions

RockLobster · 21 Oct 2016 at 08:10

Hi

Recently finished a software development project for a company I used to work for. I am also on PAYE with my current company. For most of the work I used a developer in India and a colleague I used to work with. I paid the developer using Western Union and the colleague via bank transfer. For my tax return can I claim this an allowable business expense?

It mentions subcontractors in this URL - https://www.gov.uk/expenses-if-youre-self-employed/staff. I haven't filled in a tax return before so do I put in the total amount I paid both guys?

lude1962 · 21 Oct 2016 at 08:42

just phone hmrc and ask them

edit : I suspect not
let us know how you get on

peterwalkley · 21 Oct 2016 at 09:04

Phone HMRC .... but I would think the answer is yes. I had to look into something similar recently for the missus.

The self employed part of the return (PDF linky) includes boxes for your income (box 9) and "Wages, Salaries and other staff costs" (box 13).

Kemik · 21 Oct 2016 at 09:12

Can you break that down a bit better?

You are employed with one company on PAYE and then done some work on the side for an old employer? When did the side work start? Was it while you were still working for them? Why were you paying for the contractor rather than your old employer? How have you been getting paid from the old employer? Is this on PAYE too?

Mark M · 21 Oct 2016 at 09:23

Do you have invoices from the developer and colleague? If not then no you shouldn't claim it as a deductible expenses really. Best advice is to speak to a local accountant, they'll probably save you more in tax than their fee but most definitely keep you on the straight and narrow.

RockLobster · 21 Oct 2016 at 12:19

Kemik said:
Can you break that down a bit better?

You are employed with one company on PAYE and then done some work on the side for an old employer?

Yes

Kemik said:
When did the side work start? Was it while you were still working for them?

In May this year. No I left my old company 3 years ago.

Kemik said:
Why were you paying for the contractor rather than your old employer? How have you been getting paid from the old employer? Is this on PAYE too?

Ex employer asked me to develop some software. I invoiced them and they paid me via BACS.

I did some of the work myself and contracted out the rest to a dev in India and ex colleague. I paid the contractors via bank transfer. They did invoice me.

RockLobster · 21 Oct 2016 at 12:20

Mark M said:
Do you have invoices from the developer and colleague? If not then no you shouldn't claim it as a deductible expenses really. Best advice is to speak to a local accountant, they'll probably save you more in tax than their fee but most definitely keep you on the straight and narrow.

The amount is only around 8k with no further work. Is it worth it getting an accountant involved?

I did trying phoning the tax office but can't get through.

Kemik · 21 Oct 2016 at 12:30

RockLobster said:
...

In which case when you fill in your tax return online there should be guidance on which box to put contractors in to. Should be under something like operating expenditure rather than employee costs.

RockLobster · 21 Oct 2016 at 12:40

Kemik said:
In which case when you fill in your tax return online there should be guidance on which box to put contractors in to. Should be under something like operating expenditure rather than employee costs.

Okay thanks.

Kemik · 21 Oct 2016 at 12:45

RockLobster said:
Okay thanks.

You should really read the guidance though. Don't just put something in your legal document because a random on the web told you that was a good idea, especially seen as they only know what you've described.