Keeping the Tax Man happy! When I talk to couriers about their accounts, the questions I am asked most often are “what records do I have to keep?” and “what can I claim for?”. The answers to these, of course, are “everything” and “as much as you can get away with”, but for anyone who wants a more precise answer, here are some guidelines. The records to keep are: All your dockets from the company you work for. Receipts for: Petrol, oil, spares, repairs – in fact anything for the bike Bike hire receipts if your bike is off the road Road Tax and insurance payments Protective clothing, leathers, helmet, gloves, scarves etc. Tools for DIY repairs Maps, files, copies of MCN (!) Mobile phone bills Parking charges If in doubt, keep it – any accountant would rather disregard the receipts that don’t apply rather than spend ages on the phone to you trying to fill in the gaps. Anyway, it gives us a laugh; in client’s records recently I have found receipts for a packet of Durex (what category did they think I would put that in – small tools and equipment?) and for the client’s mother’s funeral expenses! The items you can claim for which are not covered in the list above include purchase of a new or second-hand bike. The tax office estimate that you will get four years running out of your bike (you wish!) so each year you get an allowance set against your income amounting to 25% of the “reducing cost” of purchase of the bike (i.e. bike cost £3000, first year’s allowance £750, second year’s allowance £562.50, and so on). You can also claim an allowance for the use of your home as an office and/or store, so if you keep your bike in the hall at home for everyone to scrape their shins on, you can even get an allowance for it, which usually amounts to £300 - £500 per year. If you are married, you will get Married Couple’s allowance, and if you are unmarried but have a child you can get additional personal allowance, which is exactly the same deduction, currently £285. You can also pay your wife a wage for keeping your books, assuming she does not work, of up to £3,300 per year. Of course, if she does work this is not worth doing as it simply transfers the tax payable from you to her (maybe not such a bad idea!). As everybody’s circumstances are different, the things you can claim for are different too, but I hope I have given you some idea of what is needed.
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