Select Page

What expenses are tax-deductible if you are self-employed?

For those operating on a self-employed basis, paying income tax and national insurance contributions is a legal requirement. Unlike working as a salaried employee where deductions are made for you, being a business owner, even a sole trader means that you have to set aside money to pay these deductions yourself.

While paying tax is a necessary part of doing business, there are some things that you can do as a self-employed person to reduce your tax obligation and lessen the payments you will need to make. As you are now a business entity in the legal sense, there are tax breaks and benefits that you will be able to take advantage of.

It is important to check with an accountant and make sure that anything you use as tax-deductible is permissible, but working as a self-employed person can include business expenses that may be deducted from tax payments, including things such as:

Business premises
Rent, lease payments, business rates, and security costs are just some of the items that you can claim. Even if you work from home the government will allow you a weekly payment that can be deducted based on the percentage of your home that you use for business. This includes calculations for things like heat and light.

Office supplies
It may not seem a lot, but payments for things like printer ink,pens, and paper can add up. Track and keep receipts of any payments for consumable items. Larger purchases like printers, computers, and office furniture also count towards business expenses.

Insurance Payments
If your business requires that you carry specialised insurance such as public liability, the yearly costs of your monthly premiums are tax-deductible. This also applies to insurance types such as professional indemnity or travel insurance.

Travel Expenses
Using a vehicle in your business can be a large expense, the cost of any travel associated with your work can be claimed as an expense. Note that travel to and from your place of work does not apply, nor does any travel for personal reasons even if you are using a business vehicle.

Marketing and Advertising
The costs of promoting and advertising your business and services are also an allowable business expense. If you advertise using online ads like Google or Facebook or promote your business by dropping leaflets door-to-door, the cost all counts towards your tax bill. If you outsource your advertising to a social media company for example, then the amount you pay in fees still qualifies as a cost of doing business.

Uniforms and Clothing
If you need special clothing to perform your work such as a uniform or costume then you need to keep proof of any items that you purchase. Any special clothing items that are required to allow you to perform your job can be claimed as a legitimate business expense.

Trade Subscriptions and Memberships
Many types of business require membership to a governing body or trade bodies. If you are a member of a professional organisation associated with the work that you do then your annual subscriptions may be tax-deductible. Check with your accountant to find out what you can legally claim.

Conclusion

There are hundreds of deductions that can be claimed as a self-employed business owner and many can get overlooked. Understanding what you are entitled to can be made easier by engaging the services of a qualified accountant (And yes, that expense is deductible too!). A professional tax expert will be able to help you navigate tax obligations and responsibilities while helping you prepare tax returns that allow you to claim the most business expenses. Keeping your bill down and maximising your deductions.

Want more social media marketing tips?

Join over 41,000 readers who get them delivered straight to their inbox.