What Can You Claim As Self Employed?

What Expenses Can Be Claimed When Self-Employed?

If you are self-employed you are probably wondering what expenses you can and cannot include in your Tax return to claim back a Tax rebate. Here we have a summary that may help you along the way.

To ensure you receive the best possible Tax rebate it is essential to keep a record of all your earnings and expenditure. This can be done by using a cashbook or our mobile app. As a general rule, you should keep these records for a minimum of six years.

To check how the expenses affect your position, you could try the Tax rebate calculator.

Travel Expenses

Whilst self-employed there are numerous travel expenses you can claim Tax relief on. Here are some points you will need to know:

  • Expenses for journeys to and from work for temporary workplaces
  • Costs for train, bus and taxi fares can be claimed, not just motoring expenses
  • Parking fees and toll charges are also allowable
  • Breakdown cover
  • You cannot claim for non-business related driving or travel costs.
  • Not can you claim for fines.

Instead of claiming the actual motoring costs, it may actually be more beneficial to claim the flat rate according to HMRC guidelines. The amount you can claim on mileage depends on your type of vehicle and travel distance, please see the table below which provides reference of cost:

First 10,000 miles Above 10,000 miles
Cars and Vans 45p 25p
Motorcycles 24p 24p
Bikes 20p 20p

For example, if you carried out 15,000 miles (300 miles per week), then you would be able to claim £7,000 as an expense on your Tax return:

10,000 miles @ 45p – £4,500
10,000 miles @ 25p – £2,500
TOTAL – £7,000

Tools And PPE

If you work within a sector that requires certain tools, uniform or protective wear to help you carry out your work you are able to claim back on those costs. You can claim back on any tools that you’ve purchased or hired plus any PPE (personal protective equipment) this includes hi- vis and boots.

There are two ways you can claim. You can either claim for exactly what you have spent with proof of receipt. If you are unsure of the costs or have no records you can claim a flat rate deduction which is a fixed amount based on your profession. It is obviously advisable that you keep back any invoices or receipts during the course of your trade.

Office, Property And Equipment

If you are self-employed you’ll have various expenses and running costs. You can claim costs on items you would normally use for less than two years as allowable expenses. Examples as follows:

Stationery

  • Phone, mobile, fax and internet bills
  • Printing, printer ink and cartridges
  • Computer software
  • Postage

Premises

  • Rent
  • Rates
  • Light & heat
  • Insurance Costs
  • Other office resources
  • Repairs
  • Maintenance and cleaning

You can only claim for business use and purposes only. You cannot claim expenses or allowances for buying or building premises. These expenses will be of a capital nature.

Training Courses

If you have paid for any courses for yourself or an employee, you may be able to claim back the cost. This will only apply if the course is to update a current skill and not acquire a new skill set. Common courses would be CSCS for construction workers, or an SIA licence for those working in security.

For example, if your trade is that of a self-employed builder and you undertake any further training to improve your skill set then the costs for this are allowable however if you were to learn a new trade as a tiler within the building site this would not be allowable.

If the training costs are allowable, then any associated costs (e.g. travel, books or stationary) will also be allowable.

Staff Expenses

You can claim back expenses on wages, salaries and other staff costs. See below for a list of allowable and disallowed expenses.

Allowable

  • Wages and salaries including bonuses, commissions and any overtime paid where permanent, temporary or just casual labour.
  • Employers National Insurance contributions (NIC)
  • Wages costs of employing a member of your family provided that they genuinely work for the business and pay is reasonable for the amount of work they complete.
  • Staff entertainment cost for example Christmas parties.
  • Costs of subcontract labour.
  • Employee training costs

Disallowed

  • Your own drawings from the business, if you pay yourself a “salary/wages” from your business this is still classed as drawing as you cannot be an employee of your own self-employed business.
  • Any excessive wages paid to family members

Bank Charges, Legal and Financial Costs

You can claim business costs for:

  • Bank, overdraft and credit charges
  • Interest on bank and business loans
  • Hire purchase interest
  • Leasing Payments

You can claim costs for hiring of accountants, solicitors, surveyor’s and architects for business reasons and professional indemnity insurance premiums.

You cannot claim for legal costs of purchasing property or machinery or any fines for breaking the law (speeding tickets etc).

Summary

There are many areas where Tax relief can be given for business related expenses. At QuickRebates we will ensure that you are claiming your full allowances for these expenses throughout the course of the year. As a recommendation, if there is any expenditure you are unsure about, please make a record of the cost regardless and we will use our professional judgement in deciding whether or not this should be claimed.

Should you have any further queries, please do not hesitate to contact one of our team on 0191 3553553.

Comments (20)

  • Shaun fleming

    Im new to this can i claim back my tools ,diesel ,work cloths

    Reply
    • QuickRebates

      Hi Shaun, indeed you can. Tools can be claimed as AIA (Annual Investment Allowance). Work clothes can be claimed in full, including PPE. For travelling costs (diesel, MOT, Insurance etc.) it might be worthwhile claiming the flat rate mileage costs (45 pence for the first 10,000 miles then 25 pence per mile thereafter) instead of the physical costs. Drop us a line if you need more information. I hope this helps!

      Reply
  • Brad warby

    Hi, what’s the flat rate for tools and Ppe for a ground worker and cpcs telehandler??

    Reply
    • QuickRebates

      Hi Brad, there’s no actual flat rate for tools and PPE. You simply claim what you have paid out of your pocket. If it’s the first year you have been trading then you can go back for up to seven years for items used for business. I hope this helps, drop us a call if you need any more information.

      Reply
  • Paul Wilson

    Hi company supply van and fuel can we still claim for mileage

    Reply
    • QuickRebates

      Hi Paul,

      Unfortunately not, given that the mileage allowance is their to represent your own physical costs. The mileage allowance, however, doesn’t include other travelling costs such as: hotels, parking fees, toll charges. If you’ve had to pay for any of these expenses then this will be an additional claim on your Tax return.

      I hope this helps, Donna.

      Reply
  • Joanne

    Hi,

    I bought my van whilst employed now self employed but never claimed mileage whilst employed. I know there is a 4 years you can only claim back but reading the comment about ppe and going back 7 years can we do the same with my mileage. Still in First year of trading.

    Reply
    • QuickRebates

      Hi Joanne,

      You would be able to claim twice, the first claim would be for travelling whilst under PAYE (employed), and the second claim would be for your self-employed mileage. The claim’s can go back four years for employed mileage. The rates are 45p per mile for the first 10,000 miles in the Tax year, and 25p per mile thereafter. I hope this helps, Donna

      Reply
  • Joanne

    Hi Donna,

    Thank you, another quick question we are using the cash basis method, can we claim a percentage of utility bills for admin work eg invoicing, filing we have a desk and filing cabinets in our living room area. I know we need to be careful as it is our home and do not want it to become a “business property” that we maybe liable for business taxes if we were to sell?

    Reply
    • QuickRebates

      Hi Joanne, you can claim a percentage of the utility bills, but the easiest method is simply to claim a standard weekly allowance, at least £2 per week. This is known as “Office Accommodation” or “Use of Home as Office”. This would not affect any Capital Gains Tax computations. If you need any assistance, please don’t hesitate to give us a call. Donna

      Reply
  • Christopher Bates

    Hi I took a course with my employer just before I left for new employment my old employer stop me the price of the course 250 pounds can I claim some of this back now I am self-employed

    Reply
    • QuickRebates

      Hi Chris,

      If the course is relevant to your self-employed work then you should have a valid claim to make. The expense claim would be made on your actual Tax return along with other costs.

      I hope this helps

      Reply
  • malcolm smith

    My vehicle has gone in for repair, (fuel pump). Which has cost me work, can I claim this back. First year of trading.

    Reply
    • QuickRebates

      Hi Malcolm,

      Sorry to hear about the fuel pump going, that’s bad luck. You can claim the cost of the pump back as an expense on your Tax return, but unfortunately you won’t be able to claim the loss of income. Instead of claiming actual vehicle running and repair costs, 90% of the time it’s better to claim mileage allowance

      Reply
  • Roy Beale

    Hi
    What is the personal tax allowance for a CIS worker?
    Is it the same as a PAYE worker (£12,500 year)?
    My son is in his second year of trading and not happy with his accountant – landed him with a tax bill last year and a rebate this year, which does not cover the last tax bill – and seems incapable to use the figures he provides on a spreadsheet; so he is keen to move and correct last years return if possible?
    Many thanks
    Roy

    Reply
    • QuickRebates

      Hi Roy. There are two allowances, one for Tax which is £12,500. And another for National Insurance which is £8,632. With regards to your enquiry into the previous years, it could be worthwhile looking into this in more detail. Any errors, or oversights can be corrected within four years.

      Reply
  • Jayne

    Hi, If mileage allowance is claimed for a vehicle, can repairs/MOT/road tax/parking be claimed in addition? Also, can the purchase cost be claimed? This is the first year of trading.

    Reply
    • QuickRebates

      Hi Jayne,

      Unfortunately it’s solely mileage allowance, or claiming the actual costs. The mileage allowance starts from 45p per mile and includes provisions for car depreciation, MOT, insurance etc. The choice you make effects your claims for the lifetime of the vehicle. For example, you would be unable to claim the cost of the vehicle one year, then the next year start claiming mileage allowance.

      Reply
  • sonia torrance

    Hello, I am currently unemployed.I undertook my teaching course last year, I am saving to undertake a course with a governing body so I can start my own business, I cannot start my business until I do this course, could I claim back the expense of this course once I am up and running. Thankyou

    Reply
    • QuickRebates

      Hi, it would depend on what the course, and what skills you are looking to acquire. Would you like to contact us on 0191 3553553 for more information?

      Glenn

      Reply

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