If you’re self-employed, make sure you know what business costs you can claim for on your tax return to avoid paying more than is necessary in expenses.
Whether you rent your own office or work from home, running your own business can be expensive. Luckily, a lot of the costs incurred when setting up and running your business can be deducted from your turnover to reduce your taxable profit.
HMRC has clear rules and guidelines when it comes to which expenses are allowable, and incorrect claims can incur penalties.
Here is a quick rundown of just some of the expenses that are allowable:
- Business property– Rent, utility bills, water bills, security, and insurance payments.
- Office equipment and supplies– Business landline, business mobile phone, internet, printer cartridges, stationery, business postage costs, and computer software.
- Mileage costs –If your work involves driving, then you can claim for mileage, vehicle insurance, parking fees, breakdown cover, repairs and servicing, and public transport costs.
- Legal and financial costs– Including bank, overdraft, credit card and interest charges, accountant and solicitor fees, and legal fines.
- Unpaid invoices– You can claim for bad debt if you are sure that it will never be recovered from a client.
- Marketing expenses– Ads, website hosting and maintenance costs.
- Staff costs– As well as wages, bonuses, pensions and benefits, you may also claim for agency fees and subcontractors.
- Subscriptions– Subscriptions to trade bodies and professional organisation memberships.
This is by no means an exhaustive list, you can find out more about self-employed expenses on the HMRC website. If you are in any doubt about whether an expense is allowable or not, it is best to speak to an accountant before submitting your claim to avoid receiving a fine or penalty from HMRC.
If you require help with your self-assessment tax return, get in touch with our team of experts here at Michael Bell Accountants by calling us on 01484 690 730.