Working with Hermes and stumped by tax? Join our expert Ben Schaefer for a jargon-free explanation of what taxes you’re expected to pay as a sole trader.
If you’re looking for more information on taxes as a sole trader, check out the helpful resources below.
- Personal and business tax changes for the 2019/20 tax year
- What business expenses can I claim as a Sole Trader?
- How to pay yourself as a sole trader and how much to put aside for tax
If you have any further questions, don’t hesitate to contact us.
Hermes Tax Webinar Q&A
Q: Do I have to have a business bank account?
As a sole trader, you’re not required by law to have a business bank account but we do recommend it. Even if you decide not to have a Business Bank Account, you really should have a separate account for your business transactions to make your record keeping and accounting easier.
Read more in our “Do I need a business bank account?” article.
Q: I am retired, so no longer pay National Insurance (NI). Will this continue?
If you have self-employed income on top of your pension income, you may still have to pay Class 2 or Class 4 NI depending on how much profit you make - our Self Employed National Insurance article explains more.
Q: Can I claim for fuel, servicing, MOT etc?
Yes, if the vehicle is purely for business (and you have a second car for the family), you can claim full costs. You’ll need to keep all your receipts and add them all up when you do your Self Assessment. If you’re using online software you can usually take a photo of the receipts and have the software do most of the work for you!
If however, you use the vehicle for both business and private purposes, it’s usually simpler and easier to claim for business mileage rather than record all the individual expenses for petrol, MOT servicing etc. and work out what’s business and what’s personal. The HMRC mileage rates include an allowance for wear and tear and maintenance.
If you'd like more advice, we have a free, handy guide for sole traders.
Q: How can I claim for mileage, how much can I claim and how can I prove the miles?
If you drive your own vehicle for work purposes then you should record all your business mileage and claim it as an expense. As mentioned in our webinar, you can claim 45p per mile for the first 10,000 miles then 25p per mile over that amount.
You can use our free business mileage spreadsheet to record your mileage. Then when you prepare your annual Self Assessment, you‘ll deduct all your allowable expenses (including your mileage calculation) from your income to find your self-employed profit. HMRC will then tell you how much tax you owe.
Q: Will photos of your mileage before and after a shift be adequate as evidence?
Yes - but photos are probably overkill; if you do that for every shift that’s a lot of photos!
You just need to record how many business miles you travel, a simple spreadsheet of your mileage will do just fine as mentioned previously. If you’re using photos of receipts to claim actual expenses rather than mileage (as outlined in our previous answer) then that’s fine.
Q: Do you provide accounting software?
Yes we absolutely do (with accountants to support if you need any help) - with a special offer for Hermes drivers!
Q: When is the final date to send Self Assessment?
HMRC’s deadline to submit an online Self Assessment and pay any tax you owe is 31st January each year. That’s 31st January 2020 for the 2018/19 tax year.Need more advice on Self Assessment? Download our free, handy guide!
Special offer for Hermes Sole Traders
As a Hermes courier using Crunch, managing your work finances will be quick and easy. With our special offer, you'll receive an exclusive £10 discount on Crunch accounting packages, which means our Sole Trader packages start from just £19.50 +VAT per month.
For a free phone consultation call us on 0330 134 0882, or book a consultation online and we’ll call you.