Self Assessment; Tax Returns, what can you claim back?
As an Entrepreneur, Contractor or Freelancer, you’ll know tax planning can be a headache. But not knowing what you can and cannot submit on a tax return is only going to leave you missing out.
Claiming tax relief on expenses isn’t quite the same as cutting costs, but if you can claim some tax back – we say why not? We’ve helped individuals and companies for over 30 years save money wherever possible. Below, we’ve broken down all the ways you can benefit from Tax Relief via a little thing called ‘allowable expenses’.
Allowable expenses mean you can claim tax back on certain services or items you use to run your business. These can vary, but here are some of the expenses you can add to your next Self-Assessment tax return:
If you’re self-employed or work freelance, you may operate your business from your own home. In this case, you could benefit from a tax claim on your heating, electricity, council tax and mortgage interest. If you rent your office building, you can also claim back the cost of any general maintenance, council tax, water bills, gas and electricity. Additionally, the cost of repair services, cleaning and gardeners. For a more in-depth breakdown, visit the HMRC website here.
Whilst you might not be able to claim back expenses for a nice new suit, you can certainly claim tax relief if you are required to wear a special uniform, costume or protective clothing for your job.
Office Supplies & Bills
When you run a business, it quickly becomes apparent how many additional charges there are. As well as the cost of simple things like pens and paper, there’s also the bigger costs such as computers & software. You can also claim back tax on phone and internet usage. However, if you use your phone for both personal and business use, you will need to find a way to clearly divide the cost between these so that you only claim back tax on something that is classed as your business running costs.
To operate, you may need to travel for meetings or other such related business affairs. If this is the case, you can claim back for any travel where the primary reason is for business. This includes travel by train, bus, and air as well as accommodation. If you have your own vehicle you use for travelling, you can claim tax relief for fuel, parking, car insurance, breakdown cover, repairs and servicing.
Stock & Materials
When it comes to the goods you sell, you can claim tax back on any stock or materials you use to make items to sell. Additionally, you can benefit from tax relief on any direct cost you incur during the process of producing goods including any tools or equipment you require. For example, if you have a cake business you can claim back any costs involved with cooking, such as cooking appliances and ingredients.
As many business owners have a business bank account, you will be able to claim tax relief on any bank charges. For example, if you have an overdraft, credit card or loan, you will be able to claim back on any interest paid for these services.
Similarly, if you hire a professional such as an accountant, surveyor or lawyer you may also claim tax back on any of the charges incurred when using their services for your business.
If you do employ anyone to work for you during busy periods, you will be liable to contribute to their pensions and national insurance. As part of your allowable expenses, you can claim tax relief for this as well as any salaries, bonuses and employment agency fees.
The cost of advertising your business can include various expenses such as the creation and printing of marketing materials, including leaflets and print ads. There are also charges related to website maintenance and digital marketing that you can claim tax back on.
Overall, there is a whole host of things you can claim back when it comes to allowable expenses. If you’re unsure of any grey areas, we’re always here to help provide clarity on all aspects of accounting. Please get in touch for more info.