Self-employment is on the rise in the UK, but paying taxes and completing tax returns can be a hassle. To ease the burden, it is essential to know which expenses are allowable and which are not. In this guide, we will discuss common self-employed expenses that can help lower your tax bill and increase your take-home pay.
Expenses that you can claim include:
- Office expenses: If you work from home, you can claim a portion of your household bills and office equipment.
- Travel expenses: You can claim for business-related travel, but not for travel between your home and place of work.
- Accommodation expenses: If you need to stay away from home for business purposes, you can claim for accommodation costs.
- Advertising and marketing expenses: You can claim for advertising and marketing costs.
- Professional fees and subscriptions: You can claim for fees and subscriptions to professional bodies.
- Bank and credit card charges: You can claim for bank and credit card charges that are directly related to your business.
- Insurance and stock expenses: You can claim for insurance costs and stock and raw materials used in your business.
- Training and development expenses: You can claim for the cost of training and development courses that are directly related to your business.
It is crucial to keep accurate records of all your expenses throughout the year as HM Revenue & Customs (HMRC) may request to see your records to verify your expenses. There are also some expenses that you cannot claim, such as non-business expenses and personal expenses that are not wholly and exclusively for business purposes. Contact an accountant or visit Go Self-Employed if you are unsure about any expenses or need help filling out a tax return.
In conclusion, understanding which expenses are allowable can help you make the most of your self-employment status, and ensure you’re paying the correct amount of tax. So, keep track of your expenses, invest in yourself, and claim what you can.