Self-employed tax return - What can I claim for?

Self employed woman doing her tax return

If you’re thinking of going self-employed, you’ve probably got a million and one things going through your mind about how it’s all going to work. It can be an incredibly exciting time to venture out into the business world on your own, but it comes with a lot of responsibility as well.

One of the most important, albeit rather annoying, parts of becoming self-employed is completing your self-assessment expenses tax return and claiming back tax as a self-employed individual.

While there are many things you need to learn and understand about tax relief as a self-employed person, in our guide below, we’ll take you through some of the things you need to know and answer your questions such as your allowable expenses, how to claim back tax, income tax relief and how to claim car/van tax back.

Being self-employed and paying tax - how does it work?

When you’re self-employed, there are several business expenses that you can and can’t claim with the HMRC (also known as allowable and disallowable expenses).

Unfortunately, not all your self-employed business expenses are tax-deductible, and it’s up to you to know which ones can and can’t be deducted.

In order to complete your self-employed tax return and submit your tax-deductible business expenses, you are usually given the option to either submit a single figure to HMRC for your allowable expenses, or you can give a detailed breakdown of each expense.

If you choose to submit just a single figure, it’s still incredibly important to work out all your individual expenses in order to get an accurate figure of what your allowable expenses will be. HMRC might also query your figure, so it’s important to have everything outlined in detail when submitting your self-employed tax return.

While it’s not necessary to submit any receipts or other proof of purchase when filing your tax return, it’s still a good idea to keep hold of them so that you have solid evidence if you’re ever subject to a tax investigation. Keeping hold of your receipts will also help you to work out your allowable expenses and get a better figure of your expenses. 

What expenses can I claim?

As a self-employed individual, there are many expenses you can claim, including the use of home office allowance, and self-employed mileage allowance.

Below, we’ve split the self-employed tax return allowances out into different sections to make it clearer and easier to understand what you can and can’t claim for when you’re self-employed.

What are self-employed allowable expenses?

If you’re self-employed, or you’re thinking about becoming self-employed, and you’re wondering what you can claim for, take a look at some of the many self-employed allowable expenses below.

Self-employed expenses if you use business premises

If you use business premises to operate your self-employed business, you can claim for things like:

  • Heating
  • Cleaning
  • Water
  • Rent
  • Lighting
  • General maintenance 
  • Property insurance
  • Security
  • Office equipment such as postage, stationery, mobile and landline phones, internet bills, printing, and some computer software

Self-employed expenses if you work from home

If you work from home, your business expenses might be somewhat similar to those if you operate from business premises, but you’ll be able to claim for what you use while working from home, including:

  • Insurance
  • Cleaning
  • Lighting
  • Council tax
  • Water rates
  • Mortgage interest
  • General maintenance

It’s important to remember, however, that you won’t be able to claim for everything if you work from home. The tax-deductible amount that you can claim should be proportionate to the rooms you use while working from home, as well as the amount of time your home is used for your business purposes.

Claiming travel expenses as self-employed

When you’re operating a self-employed business, you might still be travelling a lot for your work, so it’s a good idea to know the type of travel expenses that you can claim for.

  • The cost of travel and accommodation used for specific business trips.
  • The cost of running and operating a vehicle, including petrol costs, insurance, car tax, breakdown and the cost of any repairs or servicing.
  • If you use a vehicle for personal purposes as well as business reasons, you can only claim for the proportion that is equal to how much you use for business purposes. In order to do this, you should keep a track of the mileage you use for business reasons.

You can’t usually claim travel expenses for travelling between your home and workplace or for the cost of buying a vehicle. You can sometimes claim a self-employed daily food allowance, but this is usually only for meals such as breakfast or evening meals that are consumed as part of an overnight business trip.

Claiming expenses on salaries and benefits as self-employed

If you’re self-employed but you employ staff, then there are a few expenses that you can claim for, including:

  • Employees' wages and redundancy payments
  • Employer's National Insurance
  • Employees’ insurance and pension benefits
  • Any provisions for childcare that you make for employees
  • The cost of training employees

Legal and financial business expenses

You can include the cost of business insurance in your self-employed allowable expenses, such as public liability insurance, employer’s liability insurance and professional indemnity insurance.

You can also claim for other legal and financial business expenses, including hiring legal professionals such as architects, solicitors, accountants, surveyors and more.

You’re also able to claim for bank, credit card and overdraft charges, as well as interest on bank loans and business loans. If you use traditional accounting methods, then you may also be able to make a claim for bad debt (money owed that you’ll never see), but this must be included within your turnover.

Remember, the business expenses that you can claim for if you’re self-employed differ from those if you’re operating as a limited company, sole trader or partnership. For advice on the tax-deductible business expenses that you can benefit from if you operate one of the business models above, check with the HMRC for clarification.

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