Self-assessment tax forms can be scary for anyone who hasn’t done them yet. Tax jargon and the fear of doing something wrong can be overwhelming but if you break it down into manageable chunks, you’ll be able to get through it with a little help.
Expenses are something that you need to keep track of over the course of the financial year – they are significant in determining how much of your self-employment income is actually taxable. Understanding what you can claim as expenses and therefore what you can write off is so important to make sure that you can keep the right percentage of your earnings. So, what can be claimed?
Materials and supplies
Firstly, the goods or supplies you use to produce or create your product are direct costs and are certainly allowable expenses. For example, if you sell cooked food the cost of your raw food and produce goes into creating the end product and thus it reduces the profit you have to pay tax on. The same goes if you’re a self-employed gardener, the cost of fertilizer or seeds is directly associated with the service you are providing.
Equipment costs
Equipment that is used to run or assist operations in your professional life can also be claimed. This may include hardware like laptops, computers and phones or machinery and tools if you’re a tradesman. Repairs and maintenance of this equipment is also acceptable expense. Purchases like vehicles are classed as capital allowances and can be claimed in a different way.
Travel costs
If you travel for your self-employed work then you are allowed to claim these expenses on your self-assessment. This could be fuel or tickets for trains and buses, but be sure to only claim expenses for travel for business purposes and not leisure. Get into a good habit of keeping these receipts and all other receipts in relation to your business proceedings.
Other business costs
There are a variety of other expenses that you can claim legally that fall into many different categories. You can claim for expenses such as electricity and business rates on your premises. Other costs such as business insurance and clothing that you or your team wears to work are also admissible. Marketing or advertising costs might not be direct costs of your product or service but they aim to grow and develop your business so these can be claimed. These could be website costs, advertising spend or marketing activities.
Hopefully the above will have given you a better sense of what you can claim in your self-assessment, but there’s plenty of other help and advice out there if you need more.
