I've been a sole Trader now for a few years and usually complete my own self assessment. So far I've done 4 self assessments and they've all been pretty straight forward as it's pretty much just been money in vs money out and any other small expenses I've learned I can claim for a long the way.
I've now got to the point where the business is growing and I'm looking to expand.
The premises I work out of is quite small and needs altering to enable me to expand with the business so I'm in the process of looking at securing a loan to make this happen.
Just had a quick question regarding the expenses side of things. Whilst I do plan on potentially hiring an accountant as my business grows. In the meantime, when you spend a large amount of money (£20,000 in this case) can this be claimed back as an expense if you loaned the money? And if so, is the expense you claim back for the loan payments or the full amount spent?
I have read that you can only claim back the interest, but surely that's not right as I'm still having to pay back the loan itself which was taken out solely to support my business?
Any advice would be appreciated.
I know some people will say just get an accountant, which is something I'm looking at but wanted an idea of what can and can't be claimed in the meantime.
Posted by No-Junket6881
1 Comment
> In the meantime, when you spend a large amount of money (£20,000 in this case) can this be claimed back as an expense if you loaned the money?
> I have read that you can only claim back the interest, but surely that’s not right as I’m still having to pay back the loan itself which was taken out solely to support my business?
There could be a bit of a language barrier, perhaps. If “you loaned the money” then that means you gave money to someone else who is then paying you back. In that case, no the interest you get is income and there’s not an expense.
If you are taking out a loan from someone else (they are giving you money) for your business then the interest you pay on that loan can be an expense because that interest is income for someone else and in general money should be taxed once.
Otherwise, money is just going back and forth and there’s no deduction or income for that.