There are so many types of expenses you can claim as a self-employed business. But here are 10 most common ones, everybody should start claiming.
You can only claim for business mileage not private. In the UK 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. In the US the optional standard tax deductible IRS mileage rates for the use of your car, van, pickup truck, or panel truck during 2015 were: 57.5 cents per mile driven for business purposes, 23 cents per mile driven for medical or moving purposes, 14 cents per mile driven in service of charitable organizations.
2. Working from home
If you work from home as a freelancer you can charge a proportion of certain household expenses – like mortgage interest, utility bills, and insurance for example. 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
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.
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.
Now for the more juicy expense claims, here’s a video of some of the funniest/oddest tax claims Fringe performers ever had to make:
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 receipts to do this is by far the easiest and most painless way to record and keep track of your claims!