If you have an unincorporated business (e.g. self-employed, sole trader, etc) and have an annual income of less than £79,000, you can consider a new taxation scheme launched by HMRC, which might mean simpler accounting.
The new scheme allows you to be taxed on money that flows in and out of your business, rather than using full, complicated accounting rules, as it involves you simply working out the cash received in a tax year, less any money spent on allowable business expenses.
This means that you won’t need to spend time at the end of the tax year making complex accounting adjustments, and other calculations traditionally designed for larger businesses.
The so called ‘flat-rates’ can be used for the following types of expenses:
- business costs for vehicles;
- business use of your home; and
- private use of a business premises as a home.
The might be welcome news for service providers, such as freelancers, hairdressers, window cleaners, taxi drivers, gardeners, painters and decorators, plumbers and electricians.