If you’re self-employed, you may be wondering what you can claim as a business expense. HMRC have set our very clear rules on what you can and can’t include and these are referred to as ‘allowable expenses’. When you come to do your yearly self-assessment tax return, you deduct these expenses from your turnover, which consequently reduces the amount of tax you owe.
Self-employed allowable expenses list
Here’s a list of things you can include as part of your self-assessment allowable expenses. If you want to claim, it’s important that you keep accurate records and any receipts as HMRC may request to see them at a later date.
Office expenses
You can claim on office expenses which you’ll use for less than two years, including:
- Phone and mobile bills
- Internet bills
- Postage
- Stationery
- Printing and ink cartridges
- Computer software (that lasts less than two years)
Office equipment
If you use cash basis accounting you can claim for the following, if you use traditional accounting instead, they’ll need to be claimed as capital allowances:
- Computer hardware
- Printers
- Software lasting more than two years.
Business premises
If you work at a separate premise you rent or own, you can claim a number of things as part of your self-assessment allowance, however if you work from home, this is worked out much differently (read more on this further down). You can claim:
- Rent
- Business rates
- Utilities
- Buildings insurance
- Maintenance and repair
- Security costs
If you purchase the property, you can’t claim any of the cost as an expense.
Professional costs
Any professional or legal costs hired to help with your business can be claimed, including:
- Accountants
- Advisers
- Solicitors
- Surveyors
You can’t claim on any professional costs for personal use.
Raw materials or stocks
For businesses that produce or sell goods, you can claim on any direct costs for raw materials or stock.
Marketing costs
Any marketing for your business can be claimed, which may be:
- Advertising
- Samples
- Website costs
Insurance
Any insurance for your business can be claimed, such as:
- Public liability
- Professional indemnity
- Travel insurance
Clothing
If the nature of your business requires you to wear specialist clothing such as uniform, PPE or costumes, this can be claimed as a self-assessment allowable expense.
Trade subscriptions
Membership to trade bodies and professional organisations can be claimed, as can any subscriptions to professional publications.
Training courses
You can claim training courses as a self-employed allowable expense, but it’s important to note that these can only be for the purpose of improving the skills and knowledge you need for your business.
Travel and transport
You can claim any transport and travel costs that are necessary to your work (excluding travel to and from a workplace), this can include:
- Bus or train tickets
- Vehicle insurance
- Fuel
- Hire charges
- Parking
- Repairs and servicing
- Breakdown cover
If you own a car that you also use personally, it can be really hard to calculate the running costs, which is why simplified expenses can be best in this instance.
Self-employed mileage rates
If you choose to go down the simplified expenses route, there’s a self-employed mileage rate offered by HMRC, currently the rates are:
| First 10,000 miles | 45p |
| After 10,000 miles | 25p |
| Motorcycles | 25p |
If you’ve already claimed capital allowance on your vehicle, you can’t use simplified expenses and once you’ve started using the flat-rate on a vehicle, you’ll have to continue doing so for as long as you have it.
Additionally, if you want to claim on a vehicle that you’ve purchased outright, this is classed as a capital allowance.
Self-employed allowances when you work from home
If you work from home, you can claim a portion of your home utility bills, but you’ll need to work out how much of your home is used for business. One method recommended by GOV is to divide the cost by the number of rooms you use for your business.
For example, if your electricity bill is £600 per year, you have 6 rooms in your home and only use one room from work, you can do a simple calculation of £600 / 6 = £100, which if you work from home full-time, is how much you can claim. If you only work from home part time, you’ll need to divide this by the number of days you work from home out of the week too.
Alternatively, you can opt to use simplified expenses instead, this is a much easier method, but it can only be used if you work from home for 25 hours or more per month.
How Accountancy Solutions can help
If all this talk of self-employed allowances has got your head in a bit of a spin, don’t worry, we can help! Our team of personal accountants and experts know all there is to know about the world of tax and can help you with your finances, freeing up your time to do what you do best.
Contact us on 01633 288 299 today and get a free personalised, no obligation quote.
Looking for more accounting advice? Read our complete guide on becoming self-employed, next.
