food allowance for self-employed

Claim Meal Expenses for Self-Employed

25/01/2023tax , Tax Saving Tips , Taxation , VAT

It sounds like a dream when you are working in the UK as a self-employed individual that someone else will pay for the food you consume in your day-to-day work life. The good news is you can actually consume this food and get the money back, sounds great? Many of you as beginners must be wondering how is that possible. Well yes, this is right and legally doable too. When you are in the role of being a self-employed individual, you are in a good position to claim the business expenses you had for the purpose of your business. The food allowance for self-employed is the way to help you out in this regard. If you go back in years, there was no such option that can allow you to claim the expenses of food consumption while you are on a business trip. However, the times have actually changed now.

As mentioned earlier, in previous years it was only allowed to get the overnight stay expenses incurred on food and stay for a business trip. However, according to HMRC now you can claim the business expenses that are purely related to the processor trade. This brings in the liability to follow the set of rules regarding this as well. These sets of rules can vary for the case of a limited company and for sole traders. Since food is a basic necessity to go on with business activities, the rules are a bit complicated to explain as well. However, in most cases when you are on a business trip, you will end up buying food and drinks to carry on the activities. This can be claimed back now. This guide will provide further information about how to organise your business expenses as a self-employed individual, what is food allowance, how can you claim back food expenses, and what is the scenario of food allowance when you are on a business trip?


Reach out to one of our professionals to get to know about the food allowance for self-employed for your interest in the UK. Get in touch and you will be provided instant professional help!


How to Organise Your Expenses as a Self-Employed Individual in the UK?

Many self-employed individuals are aware of the fact that they are under the obligation of declaring their income to HMRC and also have to deal with tax payments. In this regards the role of tax returns is very important to mention here. Dealing with business expenses and tax returns will become easier when you manage to learn the art of getting organised for this particular purpose. Organising the record and tracking of expenses is as important as carrying out your business activities. A constant record and track of the business expenses and what you have earned in the period of a month will save you from many confusions and errors. Now all you have to deal with is paying tax on the profits earned during a certain duration and your overall income will note affected in the future.


What is the Food Allowance for Self-Employed Individuals?

As per the HMRC instructions after the food policy has been reviewed, the cost of food and drinks can now be claimed. This is applicable to taxi and cab drivers. In some situations when you are on a business journey but plan to stay over at a friend’s place, you can claim the expenses spent on food and drinks even then. This set of rules becomes a little complicated sometimes. This brings confusion because you will have to prove that the food expenses are purely related to the business purpose.


How Much Can I Claim for Being Self-Employed?

It is obligatory that the food you buy on a business trip comes under the category of reasonable food consumption and not fancy. However, there is confusion about the reasonable food definition. This is because HMRC has not defined it in a very clear way. What you can do is be considerate about buying something to eat that is sensible enough to justify and does not come under the category of fancy food. This will help to provide solid pieces of evidence and make a successful claim.


What is the Scenario of Food Allowance During a Business Trip?

When you are a self-employed individual who is away from home and staying overnight for business purposes, you are allowed according to the rules of HMRC that you can claim this amount sent on food and get it back. However, here are a few conditions to meet in this regard, this will make you in a good enough position to be eligible for the claim and do the process successfully. The condition that you will have to consider before planning to claim the expenses on food are listed below:

  • The place you are travelling to is not a regular travelling place of your work routine for the purpose of business.
  • The expenses that you are trying to claim are related to the only food consumption and drinks that are done during the business trip.
  • You will have to stay overnight for the business meeting that is away from your regular routine and workplace.


The Bottom Line

Now that you have gathered a fair amount of information about food allowance for self-employed, we can bring the discussion towards wrapping up. We all wish to claim the expenses of a business trip, whether it is for food and drinks or an overnight stay away from home. However, you will have to be considerate about the criteria and requirements to be successful in claiming your expenses. You should be keeping the evidence intact as well.


Get in touch with our young, clever, and tech-driven professionals if you want to choose the best guide for food allowance for self-employed in the UK  for your interest. 


Disclaimer: The information about the food allowance for self-employed provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

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simplified expenses for self-employed
Simplified Expenses – A Guide For Self-Employed Individuals!

25/04/2022Accounting Issues , Business , Business Growth Ideas , Finance

Do you wish to turn the pain of tax returns and accounting into ease? There is actually an easy and useful way known as simplified expenses for self-employed individuals. We all can relate to the complications of reporting and bookkeeping when we are self-employed. In order to ensure the good management of small businesses, HMRC has introduced simplified expenses. It is used with a set flat rate and this ends up making the claiming process swift and easier than it ever was. Furthermore, you can use simplified expenses only when it suits your business requirements. Before we delve further into the discussion, let’s have a look at points of discussion in today’s article.   Coffee, cookies, and taxes. What a perfect match. Get in the car, and reach our office today. Call us or email us to book your initial free one-hour basic consultation to discuss your requirements. We’ll make sure that we get all your documents submitted on time. Talk to our guys today!   Introduction to Simplified Expenses Simplified expenses allowed the self-employed individuals to make accurate calculations of the allowable business expenses. Also, HMRC has set a flat rate for doing so. We all know that calculations of the exact expenditures in other traditional ways is a complicated process. This is to further bring to your knowledge that simplified expenses are purely for small businesses and self-employed individuals. The limited companies and business partnership companies are not allowed to use any of them. The list of allowable expenses for self-employed includes the cost in case you happen to live on your business premises, working from home, and the cost involves the vehicle used for business needs. Simplified expenses can be most suitable for people with straightforward tax affairs. As well as the individuals who carry out small businesses with a few business expenses. Several businessmen happen to travel a lot for their business demands. So, simplified expenses can be useful for such business travellers as well. Moreover, not everyone who belongs to the business world can get benefit from simplified expenses. In the following, there is a list of who actually can use simplified expenses. Business partners with the condition of no partner exist as a company. Sole traders   Types Of Expenses The types of expenses that are allowable under the flat rates include the following: Working from home If you are living on the business premises Vehicle cost that is used for business traveling   Get in touch, explain your requirements, or sign up online for customised services just like your business requires.   Learn The Way to Use Simplified Expenses You might be wondering how to use the simplified expenses for your business needs. To make it a seamless working process, be vigilant about the following: 1- Record Keeping: A clear record maintaining for the hours of working from home, use of a vehicle for business travelling, and how people lived at the business premises. This will help to get the most benefit and ease down the processing. 2- Work Out Your Business Expenses: As the tax year ends, you can work out your expenses by using the flat rates for work from home hours, living at business premises, and vehicle mileage. 3- Self Assessment Tax Return: All the above-mentioned amounts should be included in the self-assessment tax returns.   Simplified Expenses for Self-Employed Individuals You are self-employed and working from home, here is what you are required to do. You need to make accurate calculations for your allowable expenses and use the flat rate. The first need is to calculate the working hours from home every month. This further means that you are free from calculations of the proportion of business and personal use from the home. Internet and telephone bills are not added to the flat rates. Some other salient features at a glance include the following: Simplifies expenses are only allowable if your working hours are 25 hours or more in a month from home. The flat rate per month is £10 if the hours of business use per month are 25 to 50. The flat rate per month is £18 if the hours of business use per month are 51 to 100. The flat rate per month is £26 if the hours of business use per month are 101 or more.   Stuck with your accounts and looking for a helping hand? How about you get our guys on a quick call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today.   Conclusion Now that you have developed a better understanding of Simplified Expenses for Self-Employed people, we can sum up the discussion by saying that this process can bring ease to accounting complications only if handled vigilantly. We hope these few minutes of reading will help you to make the right business decisions.   Disclaimer: The information about Simplified Expenses for Self-Employed individuals provided in this article is general in nature and does not intend to disregard any professional advice.

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Self Employed or Limited Company
Self Employed or Limited Company: What’s the Difference?

30/12/2021Accounting , Accounting Issues , Limited Company , Sole Proprietorship

While setting up your business, one of the most crucial decisions to make is to choose a business structure. There are a lot of business structures to choose from. Limited liability partnership is the less popular business structure used by professionals. The majority of the business structures in the UK are either self employed or limited company. According to the latest reports of Statista, there are around 4.3 million self-employed workers in the UK. On the other hand, there are over 4 million limited companies registered in the UK. Let’s dig deep into both to know what are they, are taxed the same, and what cost and administration is involved. Let’s kick off with what is self-employed and what is a limited company?   We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today.   Self Employed or Limited Company: Differences Let’s have a quick glimpse at self-employed and limited companies.   What is a Self Employment? Self-employed persons work for themselves as sole traders. There are no shareholders or officers and the self-employed person has total control over his business and is liable for all the profits and losses personally. The losses made by a sole trader directly impact the personal finances of a sole trader. Income tax is payable on the profit earned and needs to pay Class 2 and 4 National Insurance as a self-employed individual.   What is a Limited Company? A limited company is a separate entity with its own identity and it is separate from shareholders and directors. The personal finances of directors of the limited company are kept separate from the company until there’s fraudulence or any breach. A limited company has to pay corporation tax on the taxable profit and they need to deduct income tax and NI from the employees’ salary through PAYE.   Tax Implications Let’s see how self-employed persons and limited companies are taxed.   Self Employed Tax Self-employed persons need to pay income tax through Self-Assessment.  They need to register for VAT if reached the threshold of £85,000 (2021/22). Here are the tax rates and threshold that a self-employed person should know: Band Taxable income Tax rate Personal Allowance Up to £12,570 0% Basic rate £12,571 to £50,270 20% Higher rate £50,271 to £150,000 40% Additional rate over £150,000 45% The deadline for online tax return is Midnight 31 January 2022. Moreover, self-employed persons need to pay Class 2  National insurance if the profits are £6,515 or more a year and Class 4 NI on profits over £9,569. Here is the rate of NI rate you need to remember: Class Rate for tax year 2021 to 2022  Class 2  £3.05 a week  Class 4 9% on profits between £9,569 and £50,270 2% on profits over £50,270 We can register you as self-employed to HMRC on your behalf!  Fill out this form and let us handle everything!    Limited Company Tax Instead of income tax, limited companies need to pay 19% Corporation tax on the annual profits. Company directors are levied tax based on the salary they earn from a limited company. Dividend tax is paid on dividends received from a company. In addition, income tax and Class 1 NI is payable on any salaries paid by the company. And companies need to pay Class 1 Employers’ NICs on salaries paid to employees.   Want to incorporate a company? Get in touch with one of our professionals. Check out our company formation package!   Administration and Costs A limited company needs more administration and management tasks compared to self-employed.   Limited Company Administration All the limited companies of the UK need to register with Companies House. It must make sure to inform the registrar of companies informed of any changes made, need to file confirmation statement and PSC each year along with the company accounts. The cost of forming a limited company is affordable and the accountants are responsible to manage the accounting tasks along with dealing with HMRC and Companies House.   Self Employed Requirements There are fewer legal responsibilities and administrative tasks in forming a limited company. You just need to register for self-assessment and pay the due tax and NI on time.   Quick Sum Up So after giving this blog a read, you have now understood which business structure to choose: self employed or limited company. As a self-employed, you are your own boss and liable to pay tax and NI 2 & 4 on your earnings. Whereas, limited companies need to pay corporation tax and Class 1 NI on salaries paid to employees. Bear in mind that there is less hassle to work as a self-employed, but with limited companies, you have to meet administrative and legal responsibilities.   Turn to us if you need any help with accounting, tax payroll, and other finance-related problems. We will solve your tax issues in no time and at an affordable price! So, contact us now!   Disclaimer: This blog contains general information about the topic.

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