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Any Extra Deductions for Painter & Decorator Poss?

Painter & Decorator Client cannot afford Tax Bill. Any more tax deductible expenses possible?

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Have a painter & decorator client. Accounts are a dream to do. Very well organised.

But he is in the middle of a sticky divorce, and all of his profits have been used for upkeep of separated wife as well as his own home arrangements. There is no sign of any financial frivolity. He is just paying for "life's essentials."

He is as financially stretched as Elastigirl. So he has no reserve to pay his income tax.

I have claimed everything allowable which passes through his business accounts, including high % of motor expenses. I have also claimed laundry (£8 x 45 weeks = £360) (he thrashed 2 washing machines in a year) plus business use of rented home. He uses 1/8th of his home as a storage bay for his equipment (half of living room) so I have claimed 1/8 of all home running costs. This equates to £750 per annum for business use of rented home.

Apart from that, I cannot see anything else remotely possible to claim. He bought a shed for storage (£220) but cannot see that qualifies for any allowances (based on previous AW Any Answers).

So does anyone out there who deals with painters and decorators know of any other expenses which are possible to claim which I may have overlooked. I just cannot think of anything else.

(P.S. Yes, I have claimed for the cost of paint and brushes, before you ask!).

Replies

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22nd Jan 2019 20:15

Triple your fee. Accounting fees are allowable.

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to Tim Vane
22nd Jan 2019 20:20

Have thought of that. But his bookkeeping is so splendid I have no stomach to punish him.

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to penelope pitstop
22nd Jan 2019 20:51

One of the partners at a previous firm of mine kept accruing £4K pa accountancy fees in the sole trader accounts of various family members, despite the bill only be £500.

Said partner may or may not have been reported to ACA around the time of his departure from the partnership.

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to penelope pitstop
23rd Jan 2019 10:21

If that's true perhaps he can claim a portion of his home expenses re a room where he does all his magnificent accounting work.

[Edit] Sorry, I see that has already been noted below.

I'm not sure if the gift aid carry back relief trick in the link below works for gifts of assets, but if it does that could perhaps work for a gift of something he no longer needs:

https://www.accountancydaily.co/qa-how-avoid-ps100k-personal-allowance-t...

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By Matrix
22nd Jan 2019 21:08

Cash basis or accruals basis and what is the year end?

Where does he do all his fantastic bookkeeping? Can you raise the use of home fraction?

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to Matrix
22nd Jan 2019 21:25

Accruals.
Year ended 30 September 2017.

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By Matrix
to penelope pitstop
22nd Jan 2019 21:42

Well you could look into changing one of them. Is there any overlap relief? Have you adjusted for WIP? Have you seen the records since then to see if there was anything related to this period?

In the overlap thread this week I pointed out that the problem of a year end early in the tax year is that the client has to put aside the tax for more or less 18 months. Your client is going to have the same problem each year now since he has 16 months of trading profits since these accounts and no money put aside.

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to Matrix
22nd Jan 2019 22:26

Yes, trying to raise the home fraction. Now looking at more business use factors.

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23rd Jan 2019 09:58

Very often the solution is not about claiming for costs, which may or may not be dubious, but to trade out of the problem.

More work or more highly paid work will provide the longer-term solution and a loan will provide a short-term one.

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to andy.partridge
23rd Jan 2019 06:20

I agree with this. Tax isn't the issue here and reducing it by fair means or foul won't solve anything.

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to andy.partridge
23rd Jan 2019 13:17

agree - once you've milked the cow you need to get another cow. He should do a course in a specialist finish - training course is tax deductable - something like tadelakt or venetian plasters - that allows him to offer something more than just painting and decorating and find a niche market paying for a more highly skilled service.

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23rd Jan 2019 10:26

Ask HMRC for a time to pay arrangement before the 31 January. They should give him one because of his circumstances.

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to Rammstein1
23rd Jan 2019 10:39

Yes. Thanks for that. We came to the same conclusion last night. It would appear there are no more expenses claimable, unfortunately.
:-(

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23rd Jan 2019 13:33

Pension contributions/scheme? ( reduce profit and benefit from tax relief? )

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to C Graham
23rd Jan 2019 15:39

Thanks, but needs cash to do this of which there is a present lack of.
Already in a PPP which is not a tax reducer for a basic rate taxpayer.

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23rd Jan 2019 21:54

Overalls
Advertising
Insurance
Subscriptions
Meals while away on jobs
Telephone business calls
Printing (paper work invoices)
Stationery
Rubbish disposal

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to C Graham
24th Jan 2019 01:07

Thanks for that. He's claiming for all of the above apart from meals while away on jobs.
Don't think he's doing many jobs out of his immediate area, although one job was about 50 miles away and he was there for a week, but he probably took sandwiches and came home every day.

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to C Graham
28th Jan 2019 11:01

Hmmmmmmm rubbish disposal. Like this thread.

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24th Jan 2019 10:16
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to C Graham
24th Jan 2019 01:11

Cant' remember asking the same question before. If I have the difference this time is that his profit has shot up but there is nothing to show for it. Looks like he was using the excess profit to repay credit card debts. So for the first time he has a large tax bill plus the first interim for the following tax year, but with nothing to pay off the tax debt.
Profit probably down for the following tax year so will scale back the interims.

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24th Jan 2019 10:44

It's not clear from when you asked about it in 2015 if he is still a Sole trader, but if so def change him to Ltd - then offset his earnings into set up costs as directors loan.

other than that you've probably exhausted the options.

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28th Jan 2019 10:11

If his customers are slow to pay it might be worth switching to cash basis for a bit of breathing space

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to Bert Clayton
28th Jan 2019 10:21

Thanks, but
They pay fast and furious.

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to penelope pitstop
30th Jan 2019 08:56

Must be on QuickBooks then.

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28th Jan 2019 11:49

Hm..........Ex Wife's wages ??

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to Mr J Andrews
28th Jan 2019 14:48

She's already a taxpayer.
The thought did cross my mind though

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By itp3e
28th Jan 2019 12:42

Dust sheets ? White Spirit? swarfega ?

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28th Jan 2019 13:05

Guard cat or dog or even parrot.
Mushy peas. tobacco (to keep you going). Laura Ashley do some nice sheets and put your own logo on the Eiffel Tower (sheets). A drone (to check out the competition). Think outside the box (there you go a cricket box in case a paint pot falls on your privates) and it really is amazing what you can come up with. The beauty is you don't have to pay for them in the year that you are claiming them. This is January just think what I could come up with in February or perhaps you might get snowed off.

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to johnjenkins
28th Jan 2019 14:04

you forgot Elbow Grease

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to johnjenkins
28th Jan 2019 14:51

Already claiming ALL of these as well as the alphabetti spaghetti.
What! Do you think I am some sort of gifted amateur?

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to penelope pitstop
28th Jan 2019 15:12

You can remove the word 'gifted'.

Don't think this has read as I intended. I meant that some are stating the obvious.

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to andy.partridge
28th Jan 2019 16:11

Was intended as a stock phrase sarcastic joke further to JohnJenkins' humorous response.
Meaning "Yes, do you think I am stupid enough not to have claimed all those (funny) expenses he mentioned".
The original post was really to find out if any accountants dealing with painters and decorators were claiming anything remotely allowable I was not aware of.
There are some brilliant accountants out there who are great at thinking "outside of the box".
As it is, most if not all the genuine expenses mentioned in this thread have been claimed, so it looks like it is a lost cause now.
It is a rather sad case.
I have done everything I can for him and the billing of my fees is is now years behind.
The next move would be to do the work for free. The job is such a pleasure to do that I have even contemplated doing this.

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to penelope pitstop
28th Jan 2019 16:02

You've already got the tartan paint, rubber nails, glass hammers and long weights I assume?
Is he left handed, if so don't forget the left handed screwdriver for the left handed screws.
etc etc.

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By Dib
to Sheepy306
28th Jan 2019 16:54

She has forgotten to claim the bubbles for spirit levels

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to Sheepy306
30th Jan 2019 09:01

If he was left handed he might have to fork out for left handed cheque books, (yes there are left handed cheque books).

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to penelope pitstop
28th Jan 2019 16:06

I know.

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to penelope pitstop
28th Jan 2019 17:18

sounds like you already are working for free!
Did you replace his wife?

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29th Jan 2019 22:11

You could consider one or more of the following but be aware of the risks:
Consider subsistence expenses if working far from home
Accrue salary/bonus to wife (earned before separation eg for answering phone, laundry etc)
Provision for post year end remedial work (if the separation/divorce is stressing him out he may have fallen below his usual standard of workmanship)
Identify any amounts received that may be deposits for work not carried out as at the year end
Provision against year end debts if any
Provide for anticipated costs of transition to MTD
Transfer business to a company and claim overlap relief

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to AndrewM627
30th Jan 2019 00:56

At long last - a genius!
Thanks for that.

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to penelope pitstop
30th Jan 2019 02:04

GOT TWO! You (some of you at least) sarcastic bunch of lemons.

Point no. 1) The client bought during the accounting period in question a new wooden shed for £200. He said it is ABSOLUTELY USED for business. I believe him.
Now if you look at previous AWeb questions on sheds there is no agreement on the tax treatment of sheds used for business.
But client says wherever he moves (home) in future (he rents his property) THAT SHED WILL DEFINITELY be going with him. His argument really is that the shed is an enormous portable storage for his equipment, and that to hire a lockup instead would cost a fortune.
But it is the issue of shed PORTABILITY which seems to make a difference.

Point no.2) His house rental is fractionally larger than for his neighbours because he has a slightly larger piece of land/yard on which he has put his "Portable storage shed".
The landlord is an accommodating, switched on builder who understand the vicissitudes of the building/painting trade. So rather than the landlord charging rent of £350 per month and the client claiming 1/8 of the £350, he is quite happy to charge a rent instead of £300 per month plus £50 pm for the rent of land for a 100% business shed. So that way client claims £300 x 1/8 plus £50 x 100%.
"Every little helps"

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to penelope pitstop
30th Jan 2019 05:58

penelope pitstop wrote:

Point no. 1) The client bought during the accounting period in question a new wooden shed for £200. He said it is ABSOLUTELY USED for business. I believe him.

Me too. The £600 shed you mentioned in the OP would be where he keeps his gardening tools.

penelope pitstop wrote:

Point no.2).....

My point 2 goes back to my comment above. Your client is rapidly becoming a non-taxpayer, but, you say, is still paying to support his sticky taxpaying soon to be ex wife. Is the question of deductibility of a £200 shed really the issue?

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to Tax Dragon
30th Jan 2019 15:43

I think there's a new question arising here - if he pays rent separately for the area where his shed is located, and that shed is used solely for bus storage, does that not imply the land is being used as a business premises for which the landlord may not have permission of use or may be liable for business rates.

I doubt the Landlord would be paying or want to pay business rates on it and it may require' change of use' even if just for a 'temporary' structure. He would have to justify why he has separated the rent of the house from the attached land in order to allow the tenant to locate a structure which is not being used for a domestic purpose but for business only which must be the case if the claim is 100% rather than pro rata.

Also a temporary structure is not necessarily one that is portable and may not be regarded as 'plant' and a view may be taken as to how long it has been in use - not whether it could or would be moved in future.

The word temporary in planning/building tends to refer to how long it will remain as eg, a 'mobile' home can still be a permanent structure and would need planning consent depending on where it was sited, for how long and whether that was permitted on the land used.

The shed's location or siting is not the temporary issue here but its use is. It may not be regarded as a temporary structure when presumably it is meant for permanent use for business storage.

And a semi - perm construction office on a big building site would qualify as a temp structure on the basis it is only for the duration of the build.

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to penelope pitstop
30th Jan 2019 16:20

You've reminded me of a definition:

" A word used by stupid people to describe competent people."

Obvs, doesn't apply here.

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