I am self employed, working on events. Sometimes I purchase things on behalf of my employer, and receive reimbursement. For example, paying for posters for an event to be printed. I include these expenses on my invoices, along with the receipts, and then get paid a single sum for both my billed hours, and the costs I have incurred on behalf of my employer.
When filling in my tax return, I can see that it says you can only use either the £1,000 trading allowance or use allowable expenses. If I use the trading allowance does that mean I have to pay tax on the reimbursements I have received from my employer for purchases made on their behalf? If so, that seems like I am being penalised for purchasing things on behalf of my employer. Is this correct?