Are you a Self-Employed Superstar? Perhaps you’re a Freelance wizard, or a small Business owner. One thing’s for sure, though — you want to keep as much of your hard-earned cash as possible. And guess what? You can do just that by claiming allowable business expenses.
Let’s dive into the fun world of the expenses you can claim and how they can help you save on taxes.
Office Costs: Your Creative Space
Whether you’ve turned your home into a bustling office or whether you have a dedicated workspace, you can claim expenses related to it. Think of it as a way to keep your creative juices flowing without breaking the bank. Here’s what you can claim:
- Stationery and Office Supplies: Pens, paper and all those cute sticky notes you can’t resist.
- Office Equipment: Computers, printers and software, all helping you work your magic.
- Home Office Costs: A slice of your household bills, such as electricity and internet, based on how much you use your home for business.
Travel Expenses: Adventure Awaits
If your business takes you on the road, you can claim those travel costs. Here’s how to keep your travel expenses in check:
- Vehicle Costs: Fuel, insurance and repairs — 100% of the costs if the business owns the vehicle, or a business portion of the costs. Alternatively, you can just claim a flat rate per mile (45p for the first 10,000 miles).
- Public Transport: Train, bus or taxi fares for those business trips.
- Accommodation: Hotel stays when you’re away for work. Reasonable stays, that is. Perhaps not at the Hilton, and not a hotel stay in Ibiza — unless your business makes that essential.
- Meals: Food and drink during overnight business trips — because who doesn’t love a good meal on the go?
Unfortunately, though, commuting between home and your regular workplace isn’t deductible.
Marketing and Advertising to Show Off Your Brand
You’ll never be able to grow your business if you don’t promote it. Fortunately, though, the costs are fully deductible. Here’s what you can claim in order to get the word out without spending a fortune:
- Website hosting and design — Your online home
- Social media advertising — Instagram or Facebook ads, for instance
- Print materials, such as business cards and flyers — because first impressions matter
Professional Fees — Get the Experts on Your Side
Do you need a little help? Hiring Professionals can be a game-changer, and their fees are deductible. Think of:
- Accountants and Bookkeepers — to keep your finances in order
- Solicitors for legal advice — because you want to stay on the right side of the law
- Consultants or freelancers — to help make your business shine
Stock and Materials: Keep Your Business Stocked
If you sell products, the costs involved in producing the goods sold are deductible. These include:
- Raw materials — the building blocks of your creations
- Stock purchased for resale — what you sell to your customers
- Direct costs of production — everything that goes into making your product
Utilities and Rent: Keeping the Lights On
If you rent a business premises, the rent is fully deductible. Not only that, but utility bills for the premises, like electricity and water, can be claimed, too.
Insurance: Protecting Your Business
Insurance is absolutely essential, and the costs are deductible. These include:
- Public liability insurance — to cover you in case of accidents
- Professional indemnity insurance — for peace of mind
- Employer’s liability insurance — if you have employees
Training and Development: Invest in Yourself
Do you want to learn something new that will benefit your business? Courses and training directly related to your business are deductible, including:
- Learning new skills — to improve your business operations.
- Attending industry-specific workshops or seminars — or perhaps networking
However, general education or training that’s not directly related to your business isn’t deductible.
Banking and Financial Costs: Keep Your Finances in Order
You can claim the costs of managing your business finances, such as:
- Bank charges for business accounts — because those fees add up
- Interest on business loans or overdrafts — keep your cash flow healthy
- Payment processing fees — e.g., PayPal or Stripe
Subscriptions and Memberships: Stay Connected
You can claim membership fees for professional organisations or trade bodies relevant to your business. In addition, subscriptions to industry-specific publications or software tools can also be claimed.
Clothing: Dress for Success
Specialised clothing required for your work, such as uniforms or protective gear, is deductible. That doesn’t include everyday clothing, though, even if you wear it for work.
Bad Debts: Don’t Sweat It
If a customer fails to pay an invoice, and you’ve made reasonable efforts to recover the debt, you can claim it as a bad debt expense.
Depreciation and Capital Allowances: Spread the Cost
For larger purchases, such as machinery or office equipment, you may need to claim Capital Allowances instead of deducting the full cost in one year. This allows you to spread the cost over several years.
Childcare Costs: If You Provide It
While personal childcare costs aren’t deductible, if you provide childcare as part of your business (such as running a daycare), the associated costs are deductible.
Tips for Claiming Expenses
- Keep Detailed Records: Maintain receipts, invoices and bank statements to back up your claims.
- Use Accounting Software: Tools like QuickBooks or FreeAgent can simplify expense tracking and tax reporting.
- Consult a Professional: An Accountant can help ensure you claim all allowable expenses, as well as staying compliant with tax laws.
Keep on Top of Your Expenses
If you’re Self-Employed, claiming allowable expenses is a crucial part of managing your finances. By understanding what you can and can’t claim, you can reduce your tax liability and keep more of your hard-earned income. So make sure you claim those expenses and watch your savings grow.
If you have any questions or need further guidance, feel free to contact me at Grace Certified Accountants. Happy claiming!