Knowing where to start with expenses can be tricky. If you’re a freelancer, self-employed or own a business, there are some things you can claim for as an expense of your business
If you’re wondering ‘how do I claim work expenses on my taxes?’ or even curious as to what is an allowable expense, then you’re in the right place! Here’s a simple breakdown of what you can – and can’t – claim back when filing your self-assessment tax return.
A breakdown of expenses you can claim
1. Office property and equipment
It’s a little-known fact that you can actually claim office expenses for items like business stationery, printing costs, and even printer ink. You can’t claim for any non-business resources, however. Here’s a full list of office property and equipment you can claim on expenses:
- Landline, mobile phone and internet bills
- Postage costs
- Printing costs
- Printer ink or cartridges
- Computer software – if you plan to use it for less than 2 years or make regular payments to renew the licence
2. Rent, rates and insurance costs
That’s right, you can even claim expenses for rent costs and rates. This includes rent for business premises; water rates; utility bills; property insurance; security costs. If you work from home you can even claim expenses for using your home as an office. However, you can’t claim expenses if you buy any building premises.
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3. Mileage and travel costs
You might be thinking “but can I really claim mileage from HMRC?” Simply, the answer is yes. If you travel as part of your business you should be claiming a mileage allowance as part of your Self Assessment return.
You can claim expenses on a number of travel costs, including:
- Vehicle insurance
- Repairs and servicing
- Fuel and parking costs
- Car hire chargers
- Breakdown cover
- Train, bus, air or taxi fares
- Hotel rooms and meals on overnight business trips
You may be entitled to a self-employed daily food allowance if the meal is outside your normal working routine. However, if you’re travelling to and from work every day, it’s unlikely that this will be considered as an allowable expense.
You cannot claim for non-business related travel costs, any fines you might incur or travel costs between home and work.
If you’re wondering how to claim mileage allowance relief on your self-assessment return, make sure you keep track of the mileage you cover when travelling for work. There are apps, such as MileIQ, which will allow you to easily keep a record of your mileage. You’ll then need to figure out how much you can claim per mile travelled. For example, if you travel by car you can claim 45p per mile for your first 10,000 miles, whereas motorcyclists will be able to claim up to 24p per mile.
4. Staff expenses
You can claim allowable business expenses on some staff-related expenses associated with their employment. This includes:
- Employee and staff salaries
- Bonuses and benefits
- Agency fees
- Employers National Insurance
5. Donations to charity
If you’ve donated at all to charity in this tax year, you’re eligible to claim for this. Donations to registered charities are 100% tax-free, so be sure to claim for this on your self-assessment tax return. These tax relief rules also apply to sole traders and partnerships. However, if you are part of a limited company then you will not be able to apply for tax relief from charitable donations.
6. Legal and financial costs
Accountancy, legal and other professional fees all count as allowable business expenses, meaning you can claim for these when filing your tax return. This includes:
- The hiring of accountants, solicitors, surveyors or architects for business purposes
- Professional indemnity insurance premiums
- Bank overdraft or credit card charges
- Interest on bank or business loans
- Hire purchase interest
- Alternative finance payments
- Leasing payments
But be careful if you are using cash basis accounting, you will only be allowed to claim up to £500 in interest or bank charges when filing your self-assessment tax return.
7. Marketing and subscription costs
If you’re looking to claim expenses on your marketing costs, you should be aware that you cannot claim for entertaining clients, customers or event hospitality. However, you can claim for:
- Advertising in newspapers or directories
- Bulk mail advertising
- Giving out free samples
- Website costs
You can also claim expenses for any trade or professional journals you subscribe to for the benefit of your business.
8. Workwear and clothing costs
There are certain types of clothing you can claim for when filing your tax return. These include work-related uniforms, protective clothing required for your job, or costumes if you are an actor/entertainer. Unfortunately, you can’t claim for everyday outfits that you choose to wear at work.
9. Council tax
Did you know you can factor in part of your council tax bill when filing for business expenses? How much you can claim on self-assessment depends on how much space in your home is taken up by your office. For example, if your office space takes up 20% of your home you can claim 20% of the cost associated with your council tax bill.
10. Unpaid invoices
This is one all business owners love to hear! If you’re using traditional accounting, meaning you do not use cash basis accounting, you are eligible to claim for any money included in your turnover that you do not receive. This is known as ‘bad debts’.
However, you are only allowed to claim for these bad debts if you are 100% certain you will not receive these payments in the future. You’re also not allowed to claim for any bad debts that are not included in your turnover or are related to the disposal of fixed assets.
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