Street Wise Magazine

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What do you think of the budget plans set out?
Some big changes here - It's important to stay knowledgable as we enter these strange times.

I am currently on Bro Radio talking about Wonder Cinema in Blackwood 🎦 and Street Wise Money

Thanks for having me Chris Birch as we talk everything business 😁😍💰

Easy

🔹 What is it? The UK's "Rent a Room" scheme allows homeowners and renters to earn tax-free rental income from a furnished room in their main residence.

🔹 How much can I earn tax-free? Up to £7,500 per year. That's over £625 per month, tax-free!

🔹 How to get started?

1. Ensure the room you're renting out is furnished.
2. Make sure it's your main residence.
3. Keep track of the rental income.

🔹 Things to Consider:

- If you earn more than £7,500 from renting in a year, you'll need to complete a tax return. Only the amount above £7,500 will be subject to tax.
- The scheme doesn't apply if your home is converted into separate flats.
- You can't claim expenses related to the letting.

DO I NEED TO LIVE IN THE SAME HOUSE AS THE ROOM AS I’M RENTING OUT TO BE ABLE TO APPLY

Answer: Yes.

CLAIM, CLAIM, CLAIM

Why would you not CLAIM YOUR MONEY.

Pay less tax and earn more.

Did you know you can count these as business expenses when your self employed?

Even if you’re just selling cookies on the side.

Pay less tax - Earn more money

Here's a comprehensive list of potential expenses for the self-employed that you can claim for. As a business, you will ONLY pay tax on your PROFITS so having expenses to claim on that you were going to spend anyway is always a good idea.

Office Costs:
- Rent for office space.
- Utility bills (e.g., electricity, water).
- Phone and broadband bills.

Home Office:
- A proportion of your home's rent/mortgage interest, utility bills, council tax, etc., if you work from home (based on the percentage of your home used for business and how often).

Travel Expenses:
- Mileage costs or vehicle running expenses (fuel, repairs, servicing).
- Train, bus, or plane tickets.
- Accommodation and meals on overnight business trips.

Clothing:
- Uniforms or protective clothing necessary for your work.
- Costumes for actors or entertainers.

Staff Costs:
- Salaries or subcontractor costs.
- Pension contributions.
- Training courses.

Reselling Goods:
- Cost of goods bought for resale.
- Raw materials.
- Direct costs of producing goods.

Legal & Financial:
- Professional fees (accountants, solicitors).
- Bank, overdraft, and credit card charges.
- Interest on loans.
- Hire purchase interest.
- Leasing payments.

Marketing & Entertainment:
- Advertising costs (e.g., newspaper, online ads).
- Website costs (domain, hosting, maintenance).
- Free samples.
- Events or launch parties (note: entertaining clients is not usually allowable).

IT & Equipment:
- Computers, tablets, and phones used for business.
- Software subscriptions.
- Printers and printer ink.
- Tools or equipment.

Professional Development:
- Training courses directly related to your business.
- Books or trade journals.
- Memberships to professional organizations.

Business Insurance:
- Public liability.
- Professional indemnity.
- Building & contents insurance (if you work from home).

Miscellaneous:
- Postage costs.
- Stationery.
- Raw materials.
- Product packaging.

Bad Debt:
- Money you're owed but will never receive (as long as the amount was previously included in your turnover).

Other Overheads:
- Rent for storage space or facilities.
- Costs of your business premises.

Remember, to claim an expense, it must be "wholly and exclusively" for business purposes. If an expense is partly personal, only the business portion can be claimed. Always keep good records and receipts, and if in doubt, seek advice from an accountant or financial expert to ensure you're claiming appropriately.

“I don’t have any money for Advertising”

The most valuable resource we have is time. If you are lacking money, could you sacrifice some time?

To sign my first customer, I offered a free month of my services and I promised to show them the results once the service was delivered.

They then decided to stick with me after seeing this. I didn't earn anything for the one month but instead of paying for an advert, I paid using my time to sign a new customer.

Nobody expects FREE forever.

Consider offering free sessions to grow clients in your business.

Hop on a trend early and start buying your own domains.

Here’s little tip from us: A.I is on the rise… are there any A.I related domains to go after?

Did you know that certain tax benefits are tied to the number of hours you work? In the UK, working at least 30 hours per week may make you eligible for Working Tax Credits or other tax incentives.

These credits can provide a boost to your income.

Check if you meet the criteria and learn more about claiming

Give “Working Tax Credits” a Google.

Want to travel the world cheaply?

Go on holidays cheaply?

We use SkyScanner.

Me and my partner recently bought return flights from the UK to Poland for a week for only £35 each so this is a personal recommendation.

We use the SkyScanner app but you can use their website too.

Here's a breakdown of what it does:

1. Flights: SkyScanner allows users to compare flight prices from hundreds of airlines and travel agents. It offers filters so users can find the best flight based on factors like duration, number of stops, airline, and more.
2. Hotels: The platform also helps users find accommodation by comparing hotel prices across various booking sites.
3. Car Rentals: Users can compare rental car prices to find the best deals available in a specific location.
4. Price Alerts: SkyScanner lets users set up alerts for specific flights or routes, notifying them of price changes.
5. No Direct Bookings: It's worth noting that SkyScanner doesn't handle bookings directly. Instead, once users find the deal they like, they're redirected to the airline, hotel, or car rentals

We want life to be an adventure for you and for money to never hold you back. Skyscanner

For today’s StreetWise advice, we have just a mini tip.

Sometimes we can overthink BIG business plans and ventures as a way to make money.

We may even think of doing more hours or going for a big promotion only to earn an extra £200 a month.

There are no rules on money. Money can be made in so many different ways and sometimes it’s right under our nose.

So why not ask a family member or a friend if they need help with something in exchange for some small cash?

If you're someone who loves to bake, why not turn your kitchen endeavours into a rewarding business venture? Here's a deeper look into the options mentioned:

🍪 Cookie Subscription Boxes:

- Concept: Offer monthly boxes filled with assorted cookies, ranging from classics to unique, experimental flavours.
- Upsell: Include recipe cards, a personal note, or themed cookies aligned with holidays or events.
- Audience: Ideal for those who love surprises and want to indulge in different treats each month.

🎂 Custom Cakes:

- Concept: Craft cakes tailored for special occasions. With the rise of cake decorating videos, people are always on the lookout for the next showstopper cake for their events.
- Specialisation: Dietary-specific options (vegan, gluten-free), themed cakes (for kids' parties, anniversaries), or luxury gourmet cakes.
- Audience: Everyone celebrating a milestone – from birthdays to weddings!

🥐 Pastries:

- Concept: Become the local alternative to big bakery chains. Produce fresh, delectable pastries without the hefty price tag.
- Variety: Sweet pastries, savoury options, or even a fusion of both. Think classic croissants to unique flavours like spicy chicken pastries.
- Audience: The daily commuter, students, or anyone looking for a quick, delicious bite.

Bonus Tip: Set up an Instagram or page for your baking business. A picture is worth a thousand words, especially when it showcases drool-worthy baked goods. Engage with your audience, take pre-orders, and grow your brand online.

Considering a Car for Your Business? 🚗

Let's break down the potential tax benefits of buying a vehicle as a business owner with a straightforward example:

Scenario: You're a business owner thinking of buying a car for £20,000 primarily for business use.

1. Capital Allowances: Claim a portion of the car's cost against your business profits. For instance, if you claim a 20% annual allowance, that's £4,000 off your taxable income for the first year.

2. Business Mileage: If you drive 10,000 miles for business in a year and claim 45p per mile, you can offset £4,500 against your taxable profits.

3. VAT Recovery: If the car is used solely for business and you're VAT registered, you might recover up to £3,333 (£20,000/1.2) of the VAT paid.

4. Leasing: Opting to lease? Let's say your monthly lease is £300. Over a year, that's £3,600 you can deduct as a business expense.

5. Other Expenses: Maintenance, insurance, etc. Say these amount to £1,000 annually; these can potentially be claimed depending on the percentage of business use.

In this example, you'd offset £13,133 (£4,000 + £4,500 + £3,333 + £1,300 from other expenses) from your taxable income due to the car's business use.

Remember: The rules can be complex, and each benefit has conditions. Always keep detailed records and consider seeking advice from a tax professional.

Get in the driver's seat of tax efficiency with a business vehicle! 🌟

I want to learn a new skill… but I don’t want to pay for it

Have your TAX MONEY pay for it

Did you know you can learn skills with your job and deduct them from your tax??

If your an EMPLOYEE or SELF EMPLOYED

The benefits of WORKPLACE TRAINING

Here are some steps on how to go about this.

EMPLOYEES (PAYE)

Claiming Tax Relief on Work-Related Training Costs:

1. Determine Eligibility: Make sure the training is necessary for your job and incurred solely because of work duties.
2. Gather Proof: Retain receipts and any documentation related to the training.
3. Use Form P87: If your claim is less than £2,500 for the tax year, you can use a P87 form.
- Online: Log into your Government Gateway account and claim online.
- By Mail: Fill out a paper version of form P87 and mail it to HMRC.
4. Await Response: If approved, you may receive tax relief as a change in your tax code for the current tax year or as a tax refund.

Apply here: https://www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87

SELF EMPLOYED/BUSINESS OWNERS

Claiming Tax Deduction on Work-Related Training Costs:

1. Determine Eligibility: Ensure that the training aims to update your skills and knowledge for your current business. Entirely new skills might not qualify.

2. Maintain Records: Keep all receipts, invoices, and other documentation related to the training.

3. Include in Self-Assessment: When completing your Self-Assessment tax return:
- Report the training cost under 'allowable expenses' for the respective tax year.

4. Lower Taxable Profit: The allowable training expenses will reduce your taxable profit, effectively reducing the tax you owe.

5. Complete the Self-Assessment: Ensure all other income and expenses are reported accurately and submit by the deadline.

Include this outgoing in your self assessment

Party Equipment Rentals - You may already have the stuff
Got tents, chairs, or party lights?
Start an equipment rental service for events.

Have you ever thought about doing this?

During the summer, I made some extra income by renting out marquees.

We already bought the marquee for an event we run the year before so I thought… “I wonder if I can profit more off this purchase”

Have a little think about what you could use around your house to potentially rent out to others.