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Self-employed Income Tax Relief- Are You Claiming All You Could?

July 3, 2020 Financial Tips

As much as we’d all rather not pay taxes, it is compulsory. But have you checked if you can deduct any more of your expenses against your tax-deductible profit?

The gov.uk website has an abundance of help with what you may or may not claim for income tax relief, but for now, here is a short guide to help you check if it is all in order.

This first section applies if you are self-employed. Here are a few things you could use to your advantage if you’re not already aware.

  • Office costs- this includes stationery, printing (and ink), postage and computer software. Within this bracket also falls rent for your business property, utility bills, insurance, and the part of your home that you may use as an office.
  • Travel costs- if you use a car, you can claim with insurance, road tax, repairs and servicing, fuel, parking costs, licence fees, breakdown cover and even public transport fares. Hotel rooms and meals on business trips are also allowable.
  • Clothing expenses- you can claim allowable business expenses for uniforms, necessary protective clothing but not for everyday clothing, even if that’s what you wear to work.
  • Staff costs- allowable business staff salaries, bonuses, pensions, and benefits. Agency fees and subcontractors are in this bracket too. Any training courses related to your business can be claimed against the tax-deductible profit also.
  • Items you buy to sell on- this includes stock, raw materials, and direct costs from producing goods. It does not cover goods for private use or ageing of equipment.
  • Financial costs- hiring your accountant, a solicitor, surveyor, or architect for your business will be included in this category. Also included are bank, overdraft and credit card charges, interest on business loans, HP interest and Islamic finance. Public liability insurance is yet another.
  • Advertising or marketing- any advertising in newspaper or directories, bulk mail advertising, free samples and website costs are deductible. Any trade/ professional subscriptions or memberships are included here too.
  • Training courses- to claim, they must be related to your business. This does not include starting a new business nor expanding into new areas of business. There are stipulations to a few of these, so be sure to head over to https://www.gov.uk/expenses-if-youre-self-employed to ensure that you have the correct information about income tax relief. For example, if you run your own limited company, the rules that apply will be different.
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