If you’re a business owner and a sole-trader, there are tax-deductible expenses that you can probably claim. Tax-deductible means that you can deduct them from your sales/turnover to lower your taxable profit – the result is you pay less tax.Obviously, everyone is running different businesses so the exact tax-deductible expenses will also be different. Here are a few things to consider claiming for, although do remember that not everything applies to everyone (and you may have some tax-deductible expenses that are not on the list):
- Cost of all your materials
- Cost of things like advertising, promotion
- Business Assets/Capital Expenditure*
- Office Equipment, computer, printer*
- Use of home
- Mobile phone
- Stationery & office supplies
- Telephone/broadband (take a proportion for your business use)
- Travel expenses (keep a diary or record of mileage), train fares and so on.
- Newspapers etc…
- Any professional services you have paid for
*Remember – Capital expenditure (eg buying a van, equipment and so on) and depreciation on those assets are not tax-deductible in the same way as normal business expenses.
Instead you claim Annual Investment Allowance and/or Capital Allowances on these items.
Your own drawings (which is what you take out of the business and what you might think of as “wages”) are not tax-deductible as a sole-trader. When you are a sole-trader your drawings come out of your profit – and your profit is taxable.
Keep the receipts and invoices for everything you buy
Keep all your bank statements
If your turnover is less than £70,000 you can probably get away with filling in the “short” employment pages and putting a total figure for your business expenses. If not, or your business/tax affairs are more complex, then you’ll have to use the “full” employment pages. If your turnover is more than £70,000 you’ll have to enter some more detailed information about your business expenses.
If you’re not sure which sections and pages of the self-assessment tax return apply, get in touch – always glad to help.