Allowable Expenses for Sole Trader

[LifeOfRyan]

Hello all,

Its time to get my tax return in order again but its only the second time i have ever done one so need some advice, last year I didn't claim any expenses at all mainly because i found it all so confusing. But this time I have been reading various sources which say i can claim for cost of stock purchased to resell, I build computer systems to order so does this mean I can claim for the cost of the parts I purchased to do this? And is it a proportion or the full amount?

Thanks in advance for any advice.

[Pixie]

Re: Allowable Expenses for Sole Trader

I think SXGuy will be able to answer your question.

[Enforcer]

Re: Allowable Expenses for Sole Trader

Stock is a business asset,goes into profit and loss account. Tax is due. Stock relief was dropped years ago.

[SXGuy]

Re: Allowable Expenses for Sole Trader

Enforcer, this isn't stock to store in a shop, this is purchases the op has made to carry out the work and charge accordingly. Therefore its a cost of sales.

Yes its an allowable expense.

The tax due is charged on the net profit, the stock bought would have already been included in the charge to the client at that time.

Work Completed XXXX
Less Cost of Sales
GROSS PRFOFT.

For tax return purposes, the expenses box, is the total expenses, plus cost of sales.

[Enforcer]

Re: Allowable Expenses for Sole Trader

Yes, highways used all of the items, they are a cost of sales. Any parts in stock after computers are built would be stock asset.

[SXGuy]

Re: Allowable Expenses for Sole Trader

Yep, Agree