self-employed / 2 posts found
Exclusivity and tax relief
In order to qualify as a deduction for tax purposes we have to demonstrate that the expenditure was incurred “wholly and exclusively” for the purposes of our business or employment. We will also need to consider a further criterion: where the expenditure has a duality of purpose. In a 1980’s case, a barrister claimed for the cost of business suits which she insisted were only used for business purposes. To her delight, the lower courts agreed, but HMRC were having none of it and pursued their case to the House of Lords where the taxpayer’s claim and appeal was dismissed. [...]
Self-employed liability
If you are a sole trader, or in a basic partnership, and if your business gets into financial difficulties, any liabilities that cannot be covered by the disposal of business assets may have to settled out of personal assets. In accountancy speak, you have unlimited liability; there is no protection for your personal assets. You have options. The Office for Tax Simplification has suggested, welcomed, the idea that sole traders can elect for a form of limited liability status that will allow them to protect their homes from any claim by business creditors. At present, this is pure conjecture. Mr [...]