What tax allowable expenses can I add to my Self Assessment?

Claiming back on tax allowable expenses is an efficient way to reduce your tax bill. But depending on whether you are employed or self-employed, there are a number of business expenses that you can (and cannot) claim through your Self Assessment tax return.

I’m self-employed

You have a bit more flexibility when running a self-employed business. Allowable expenses are generally anything that is wholly business related, and purchases that are necessary for you to run your business. Capital assets, such as computers or machinery, have slightly different rules to the above expenses.

So, what can I claim?

Your claim will depend on your profession and industry. The Taxd software will use this information to suggest the expenses that are specific to you and your industry. For example, as a personal trainer you may need to purchase fitness equipment for your business which may be eligible to be claimed as a business expense. However, this would not be allowable if you are a musician.

Generally, expenses will fall under a handful of categories:

Office, property, and equipment

This would include items such as stationery, office rent, and equipment you may keep in your office. Again, this would depend on the profession. Items such as computers can be claimed as an allowable expense if using cash basis accounting. If you use traditional accounting, equipment that can be used for over 2 years will need to be treated as a capital allowance.

Travel and accommodation expenses

You can claim the costs of travel associated with business trips, including the costs of running a vehicle. This could include petrol, insurance, repairs, and more. If you use the vehicle privately, you will need to apportion the costs between work and private. This can simply be the ratio of business mileage to total mileage — that is, what percentage or portion of your total mileage you lawfully believe was used for business purposes. But remember, you cannot claim costs for travel to your usual workplace.

Clothing expenses

You can only claim for uniform, protective clothing, or costumes. If you use the clothing in your day-to-day life, you cannot make a claim. For example, a construction worker who purchased a hard hat will be able to claim for the cost. Or a content creator that may use an outfit for a specific piece of content, will be able to claim the cost of the costume.

Staff expenses

All costs associated with paying wages can be claimed as a business expense. Salaries, bonuses, national insurance, and more. This also includes subcontractors. You will not be able to claim for domestic help. A common example is hiring nannies to provide childcare while you're working.

Reselling Goods

Goods that are bought for resale, or the direct cost from producing goods, can be deducted as an allowable expense. Any goods that are subsequently used for private use, cannot be claimed.

Legal and financial costs

Do you have to pay an accountant? This can be claimed on the tax return. This means the Taxd fee will be an allowable expense, too! If you have to pay for legal advice, surveyors, or architects, all these costs can also be claimed. This includes any management or agent fees that may incur in your business. Financial cost can also be claimed, including any credit card charges and interest on bank loans.

Marketing, entertainment, and subscriptions

Advertising, setting up your website, or providing free samples are all considered to be allowable expenses. However, the costs of entertaining your clients, suppliers, or customers is not allowable. Subscriptions include any fees related to a professional or trade body. If related to your business, this will then be an allowable expense.

Training courses

Training is an important part of development and growing your business. If the training course is related to your business, then the costs associated can be claimed.By claiming these costs, you will reduce your taxable profit, and therefore your tax liability. Full details can be found on HMRC's guidance and support.

If you want to know about your specific profession, get in touch and the Taxd will have the answers.