As a sole trader, you may have allowable business expenses which you can use to reduce your taxable profit. Or to put that in English, if you used the money entirely and exclusively for your business then it might be a claim. For helpful advice from Accountants Bath, visit a site like //chippendaleandclark.com/accountants-near-me/bath/
Common allowable expenses (with examples)
1) Office and admin
Stationery, printer ink, postage
Business bank charges
Software subscriptions (e.g., accounting tools, design apps, scheduling tools)
Professional memberships and trade bodies
2) Marketing and advertising
Hosting, domain name and maintenance of the site
Google/Facebook ads
Business cards, flyers, signage
Meetups and networking events
3) Travel (business journeys)
If you travel for work, meet clients or suppliers, then it is claimable.
Train, bus, taxi fares
Parking (but not parking fines)
Lodging for business travel or overnight stays
When you are driving your own car, typically you can deduct either:
Mileage (simplified expenses), or
Proportion of usage for a vehicle (fuel, insurance and repairs) if it is used for commercial purposes.
4) Working from home
You might be entitled to claim a portion of if you work from home:
Heating and electricity
Broadband
Repayment of rent or interest on a mortgage
Or you can typically keep it simple with HMRC’s simplified expenses method.
5) Professional fees
Accountant or bookkeeper fees
Income spent on business-related legal costs
Commercial insurance (ie professional indemnity, public liability)
6) Training and education
Training is (usually) claimable when it maintains or improves skills that are already being used in the business, for example a refresher course or software training. Training to begin a new trade is less likely to be allowable.
Expenses people often get wrong
Common clothing: in nearly no instances claimable unless branded uniform or gear.
Meals: normal every day food will not usually be allowed. Overnight business travel is different.
HMRC only accepts the entertainment of clients in exceptional cases.
A simple rule to stay safe
Ask this before claiming – would I have spent this money if not for the business? The answer here is yes, then there are higher chances that it’s more of a permitted expenditure.
Photograph each receipt and then keep it for the next six years alongside a date notation whereby a CPA is able to do their reconciliation come tax season with ease.
