The deadline for the Self-Assessment tax return is just around the corner, 31st January if you file online.
Disclaimer: This post is not intended to provide legal advice for your company to use in complying with UK tax laws. It is intended to provide background information to help your understanding of your responsibilities in submitting your Self-Assessment tax return. We recommend that you consult with a legal representative or attorney for legal advice that takes into account your specific cicumstances.
You should have kept records, such as bank statements or receipts, so you can correctly fill in your tax return and send it using HM Revenue & Customs free Self-Assessment online service.
Check out this video tutorial from HMRC for help signing in & completing your tax return online.
Make sure you’ve submitted your return by the deadline as you’ll get a penalty of £100 or more if it is late! For a bit of stress relief this tax period, check out last year’s most ridiculous excuses for handing in a self-assessment late.
As a sole trader, contractor or small business you’re sure to rack up several hundreds of pounds in expenses over the tax year. However, did you know you can include certain ‘allowable expenses’? Check our guide to what you can include below:
This can include your office stationary, power costs and phone bills. This includes computer software licences, postage and printing costs.
You can also claim for repairs & maintenance of business premises and equipment as well as rent for business premises.
Make sure this total doesn’t include any personal, non-business use of phones, premises or other resources as these are not counted as allowable.
Travel costs can include fuel, parking charges or train and bus fares which were incurred whilst you were working. It can also cover your vehicle insurance and breakdown cover.
Travel costs also include any hotel rooms and meals on overnight business trips.
You can’t claim for any non-business driving or travel costs, any fines you incur or travelling between home and work.
If you have to wear a uniform to work or require safety equipment to wear while at work this can be included as an allowable expense. It also includes costumes or actors or entertainers. A smart suit or pair of shoes doesn’t count as an allowable expense, even if you wear it for work.
Staff costs can cover salaries or subcontractor costs. It also includes pensions, benefits and employer’s National insurance. You can’t claim for carers or any domestic help such as nannies or child care.
Things you buy to then sell on
Also known as reselling goods, you can claim allowable business expenses for stock, raw materials and the direct costs from producing goods. This doesn’t include any goods or materials brought for private use and the depreciation of equipment.
You can claim costs for accountancy, legal and other professional fees including hiring of accountants, solicitors, surveyors & architects. Bank, overdraft and credit card charges, interest on bank & business loans, leasing payments and hire purchase interest can also be included. You can claim for any insurance policy for your business.
You can’t claim for legal costs of buying property or machinery, any fines for breaking the law, repayments of loans, overdrafts and finance arrangements.
Advertising or Marketing
Allowable expenses also include advertising, marketing and subscription costs. You can claim for advertising in newspapers or directories, bulk mail advertising, free samples and website costs. When it comes to subscriptions trade or professional journals and trade body or professional organisation membership can also be claimed.
You can’t claim for entertaining clients, suppliers and customers or even hospitality. Also not included are payments to political parties, gym membership fees and donations to charity.