Self Employed Expenses

Not all business expenses are tax deductible, so it's important to make sure you claim all that you can.

In general, if something you buy for your business is not a capital asset, you deduct its full cost when working out your taxable profits allowing you to you get immediate tax relief for the full amount.

The expenses that you can claim include:

Salaries and benefits

• Employees' wages and redundancy payments;
• Employers' national insurance deductions;
• Insurance and pension benefits for employees;
• Any employee childcare provisions you make;
• The cost of training employees

Dedicated business premises

• Heating;
• Lighting;
• Cleaning;
• Water rates;
• Rent;
• Business rates;
• General maintenance

Travel and accommodation

Running costs of a car or other vehicle – petrol, car tax, insurance, repairs and servicing. If you also use the car privately, you can claim only a proportion – usually the ratio of your business mileage to your total mileage, therefore you will need to keep a log of all your mileage.

Travel and accommodation on business trips and between different places of work can be claimed as well.

Expenses that are not allowable include:

Salaries and benefits

• If you are self-employed you cannot claim your own wages, salary or other money drawn from the business
• Your own national insurance contributions and income tax, penison costs and life assurance costs

Premises

• You cannot claim the initial cost of buildings, alterations and improvements, such work may qualify for annual investment allowance or capital allowances.
• A proportion of bills relating to private use of your home.

Travel and accommodation

• Travel between home and workplace
• Cost of buying a vehicle (but may qualify for capital allowances)
• Meals, except reasonable amount for breakfast and evening meals on overnight trips. (There is no definition of 'reasonable'. You must keep receipts and may need to argue your case.)

If you can divide an expense between business and personal cost (car running costs between business and personal travel, say), the business proportion is deductible.

Should you have any questions regarding expenses, please do not hesitate to contact Tax Advantage