Allowable expenses you can claim if you’re self-employed

An article from Sage provides a comprehensive guide on allowable expenses for self-employed individuals in the UK, helping them reduce their self-assessment tax bill. Here are the key points:

Income tax relief

• Claiming business expenses: self-employed individuals can claim tax back on certain business expenses, reducing the profit on which they pay tax. For example, if your turnover is £80,000 and you claim £20,000 in allowable expenses, you only pay tax on £60,000.
• Simplified expenses: flat rates for vehicles, working from home, and living on business premises can simplify the calculation of tax relief.

Allowable expenses list

• Office equipment and tools: expenses for business equipment like laptops and software used for less than two years can be claimed.
• Stationery and communications: costs for paper, postage, and business phone and internet bills are allowable.
• Professional services: fees for accountants, lawyers, and other professional services related to the business can be claimed.
• Staff costs: salaries, bonuses, pensions, and National Insurance contributions for employees are allowable.
• Travel costs: business-related travel expenses, including train, bus, taxi fares, and accommodation, can be claimed.
• Vehicle costs: expenses for petrol, insurance, repairs, and mileage allowance for business use are allowable.
• Food and clothing: costs for uniforms, protective clothing, and business-related food and drink can be claimed.

Working from home

• Home expenses: a proportion of home expenses like heating, electricity, and mortgage interest can be claimed if you run your business from home.

Tracking and claiming expenses

• Record keeping: it’s essential to track business expenses throughout the year and keep organised records. Using accounting software can help.
• Claiming process: add the details of allowable expenses to your tax return, either as a single figure or a detailed breakdown.

For more information and the full article, visit Tax deductions UK: Allowable expenses you can claim if you’re self-employed – Sage Advice United Kingdom