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Trading Allowance vs Expenses?

I will be doing some self employed CIS deducted sub contracting work this financial year so have followed the guide for that to keep track of the deductions against my invoices.

My question is more to do with the £1000 trading allowance as I am unlikely to incur expenses in the period more than that and I understand that on my return I can use the £1000 trading allowance instead of any expenses I do incur if they are less than the £1000. How do I go about on Quickfile to record the £1000 or do I even have to?

I did have a good look through the forums but couldn’t seem to find anything about the trading allowance.

My opinion is you don’t record it on quickfile as its an allowance not an expense.

However are you sure there’s no expenses larger than the trading allowance?

Use of home.
Cleaning and purchasing of protective clothing.
Fuel or travel costs (not from home to place of work)
Accountancy fees (if any)
Capital items like tools

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Hi,

Thanks for the reply and I guess that makes sense to not record it at all so assume if I do record any expenses on quickfiles then come self assessment time just choose whichever figure is higher to use.

It’s highly unlikely I will have expenses amounting to £1000 by the end of April but of course always possible.

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Yes, that’s correct. Record all your expenses on QF and then at the end of the year you have the option to claim the £1,000 allowance if your expenses are less than this.

Bear in mind, capital items like tools etc. are not an expense though. These are claimed through the capital allowances scheme but you can’t do this and then claim the £1,000 trading allowance.

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Thanks for the further clarification and makes much more sense to me. Is the capital allowances scheme for cash accounting too or just accrual?

Capital allowances is a tax adjustment nothing to do with vat. Unless you mean cash basis. Sometimes the two are confused with cash accounting for vat.

Yes sorry I meant cash basis, no fear of me needing to be vat registered.

You can claim capital allowances if you use the cash basis. They are an allowance against your taxable profits. There is more information on the scheme here: https://www.gov.uk/capital-allowances/what-you-can-claim-on

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