Self-Employed Allowable ExpensesSelf-Employed Allowable Expenses

If you’re self-employed you’re probably wondering what expenses are deemed allowable by HMRC. So, we’ve put together a guide to explain some of the common allowable expenses for the self-employed.

Different rules apply for limited companies.
 

Business Premises

Rent, utility bills, property insurance, security, maintenance and repair are allowable expenses. However, you can’t claim for buying a property.

If you work from home? The methods below will explain how you can offset some of your costs:

  • You can use the simplified rate of £4 per week. However, you can only use the simplified method if you work for more than 25 hours a month from home.
  • You can apportion your home running costs by calculating how you use your home to run your business. For example, the percentage of time you use your office space for business.

 

Clothing

Uniforms, protective clothing needed for work and costumes for entertainers are allowable expenses.
 

Legal and Financial Costs

Hired professionals are allowable expenses such as an accountant, solicitor, surveyor and architect used for business purposes.

You can’t claim for costs of buying property and machinery. However, if you use traditional accounting, you can claim for these costs as capital allowances.
 

Marketing

This includes the cost of newspaper advertising, directory listings, mail shots, free samples and website costs.
 

Office Equipment

This includes stationary, postage, printing costs and cartridges.

Also, equipment such as computers and printers can be claimed as an allowable expense if you use cash basis accounting. You can claim capital allowances if you use traditional accounting.
 

Staff

Employee and staff salaries are considered an allowable expense. Including bonuses, pension contributions, benefits, agency fees and employer national insurance contributions.
 

Travel and Subsistence

If you’re work requires you to travel, you can claim for travel expenses. For example, train, bus, air and taxi fares are an allowable expense. However, you can’t claim if you’re travelling from home to work or for non-business travelling.

If you pay for accommodation for the purposes of work, then you can claim the expenses as tax deductible. If you use the accommodation for personal use and business use, you can calculate the proportion of business use.

Vehicle insurance, servicing, fuel, hire charges and meals for overnight business trips are also allowable expenses.

Remember to keep receipts and other records of expenses as proof of purchases.