skip to navigationskip to main content

December Question and Answer Section

Q. In September 2013 I started working through my own company but I haven't drawn a salary yet. Can I award myself tax free childcare vouchers as an employee of my company? I was previously on a salary of £50,000 with my former employer. Would that affect the amount of childcare vouchers I can receive tax free in this tax year?

A. As an employee of your company you can receive childcare vouchers. The other conditions of a childcare voucher scheme must also be met, For example, all other employees of your company should be offered childcare vouchers on the same terms. Your previous salary is not relevant to the amount of tax free childcare vouchers you can receive from your current employer. If your expected salary for this tax year (don't include dividends or bonuses you may receive), will be less than the basic rate band - pro rata over the rest of the year, you can receive the maximum of £55 of tax free childcare vouchers per week.

Q. I act as a DJ for parties and other events. For themed parties (e.g. Halloween, 1970s) I wear clothes to suit the occasion. Can I claim the cost of those clothes as an expense in my self-employed accounts?

A. The Taxman will not allow a deduction for the cost of ordinary clothes which are required "for warmth and decency". However, where the item is needed for safety purposes, like a hard-hat on a building site, the cost is allowable. The same applies for the cost of a costume worn to identify the person in a role, such as a barrister's legal wig and gown, then the cost is normally allowable.

If your clothes amount to a costume for entertaining, then the cost is normally allowable. However, if you also wear those clothes as part of your everyday wardrobe for warmth and decency then the cost is not allowable. Try asking yourself: "would I wear this when I am not working as a DJ". If the answer is 'yes', the cost is not allowable.

Q. My company is considering purchasing a VW Caravelle for me to use as my family vehicle. It is sold by the commercial van centre rather than the VW car dealer. Does that mean the company can claim back the VAT on it?

A. VAT can only be reclaimed on commercial vehicles such as; lorries, vans, buses, or cars used for daily rental to customers or as demonstration vehicles in the motor industry. Irrespective of who sells the vehicle, if it is designed to carry people rather than goods it is a car not a van, unless it's a bus designed to carry 12 or more people. To qualify as a van it must have a payload of at least 1000Kg.

request-a-callback

Request a callback

Let us know and we will be happy to call you back.

get-in-touch

Get in touch

Simple way to contact us. Just fill in a simple form.

free-consultation

Free Consultation

We will offer as much advice as we can.

our-services

Our services

Find out details about what we can do for you.

Keep up to date

Why not sign up to our newsletter and keep up to date with all thats happening @KPSK Accounts & Tax Limited.

Please read our Privacy Policy before signing up