Sole Trader Top 10 expense claims

  1. Mileage: You can only claim for business mileage not private. And be careful if you work in the same office or co-working space every day or travel to the same client during a long term contract as that could be viewed as normal commuting and is not allowable for tax purposes. You can claim 45p a mile for cars for the first 10,000 miles, and 25p a mile above 10,000 miles. If you prefer two wheeled machines, as a motorbiker you can claim 24p a mile and for those of you on a fitness kick, cycling can be claimed at 20p a mile.
  2. Working from home: If you work from home as a sole trader you can charge a proportion of certain household expenses – like mortgage interest, utility bills, and insurance for example. The most common way to calculate the proportion to charge is to base it on the total number of rooms in your house and divide the bills by the rooms you use for business and the percentage of time those rooms are used (try not to use part of your house exclusively for business then this can give you problems with capital gains tax when you sell your house in the future). It can be a little tricky to get this right, but you can find a great guide HERE. Alternatively, you can claim from £10 a month under the ‘simplified expenses scheme’ where you use part of your house for work, which is an easier calculation! More info on that HERE
  3. Telephone: You can claim a proportion of your line rental and call charges. Be honest and realistic about this – there should be a fair split between business and personal calls – and X factor voting is definitely out! It is best practice to keep a record of it (a call log) to support your tax return.
  4. Broadband: These days, few modern businesses can operate successfully without broadband and HMRC recognise this. As with phone charges, you can also claim a proportion of your broadband costs – again, you should support this through monitoring business vs. personal use . You could keep a log for a couple of weeks every few months assuming that those weeks are representative.
  5. Business insurance: If you need any insurance for your business, e.g. public liability insurance, professional indemnity insurance, etc. then the cost is tax deductible.
  6. Website costs: Ongoing website hosting costs for your business site are tax deductible. But don’t mix this up with website development costs as they are classed as capital expenditure and treated differently. If in doubt, ask for advice!
  7. Advertising and marketing: You can charge your PR, advertising, and marketing costs against your business profits. Just remember though – business entertainment does not fall under this heading and is not tax deductible.
  8. Magazine subscriptions: If you have a subscription to a magazine (online or paper), trade paper, etc. which is relevant for your business then you can offset this against your business profits.
  9. Professional fees: If you pay an accountant to do your accounting or a lawyer to draft your terms and conditions for example, these fees are allowable for tax purposes.
  10. Professional development training: If you need to keep your skills and knowledge up to date then you can claim costs for training against your profits.

All the above information is meant as a guide. The key is to ensure you keep good records of your expenses, and all your receipts to support your tax return. Using 1Tap to do this is by far the easiest and most painless way to record and keep track of your claims!

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