Advice please

jackie Registered Posts: 81 πŸ’« 🐯 πŸ’«

This is the situation...

I have just had a call from a local lad who works is a farm worker, he is registered as self employed and although he has worked on 3 different farms during the last 18 months, he has only worked at one place at a time. i.e same farm 6 days a week continous then moved to a different farm for various reasons. His mum phoned hmrc last october when filling in his tax return and was told that he could only claim for workwear, fuel whilst at work - because he worked for one farm at a time. I understand this.

My query is, he owns his own tractor (value over 6k) and uses the tractor to do work on the farm, he is responsible for all repairs etc to his own equipment. So, as he only works at one place is he self employed and can only claim as told by hmrc, or as he has his own equipment which he uses to carry out his work is he technically a sole trader and could claim all expenses?

Any help would be appreciated :001_smile:



  • groundy
    groundy Registered Posts: 495

    It is up to the farmers he works for to determine whether he is employed or self employed.

    If they pay him on a self employed basis then expenses would be recovered as with any other business and capital allowances would be allowed on the tractor subject to any private use adjustment.
  • Emthi
    Emthi Registered Posts: 53 πŸ’« 🐯 πŸ’«

    Yes he can calim the expenses which wholy and exclusively incurred in the business activities. Just make sure, as groundy says, he is self-employed and paying class 2 NI contribution. The tractor expenses etc, fuel, are allowable expenses, as long as he does not travel from home to work,lol
  • jackie
    jackie Registered Posts: 81 πŸ’« 🐯 πŸ’«
    Hi, all as I thought and after a further call to the lad himself (not mum - she didn't seem to know:ohmy:) I have established that he has registered as self employed and pays class 2 NI contributions. I will do an adjustment for him for capital allowance on his tractor and other business expenses. All this as they thought they could save on accountancy fees and then horrified because they recieved a larger than expected tax bill!

    Thankyou for the speedy responses!

  • Emthi
    Emthi Registered Posts: 53 πŸ’« 🐯 πŸ’«
    Could be a big fat profit

    after applying, as you say, all the allowable expenses and capital allowance, as you know, you will get the taxable profit.
    My guess is that he could have been incorrect in his income and expenditure calculation, or it might be a big fat profit; better find a professional nearer to him.
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