Expenses you may be missing out on as a sole trader
For more information on what expenses you can claim as a sole trader, you may find our pages below helpful:
- A guide to sole trader expenses
- Top ten expenses to claim as a sole trader
- Claiming expenses as a sole trader
- What expenses can and can't I claim?
- What expenses can I claim if I am working from home?
Claiming expenses as a sole trader can seem confusing, but as you receive tax relief on all business expenses it is worth finding out what you are entitled to claim, as it could just save you money.
An expense could be anything as long as it is a cost incurred solely and exclusively for your business. To help ensure that you are not missing out on any expenses that you are entitled to take a look at these common expenses that are often forgotten.
It is definitely worth noting that all bank charges, such as loan interest or overdraft charges on business accounts may be classed as business expenses.
If you work from home you could claim a proportion of your broadband charge. As with all costs that can be for both business and personal use you will need to calculate the percentage of your broadband that is used for business and apply this percentage to the overall amount.
Whether you work from home the whole time, or just a fraction of the time you could be eligible to claim a proportion of your household costs such as gas, water and electricity.
The amount that can be expensed is based on the time that you spend working from home, the number of rooms in your house and the number of rooms that are used for business.
Items purchased before you registered as a sole trader
Items that you may have bought in preparation for your business such as office furniture, may be eligible to be claimed as pre-trading capital expenses. Speak to your accountant for more information on how capital expenses work.
Laptops and computers
The cost of equipment that is used exclusively for your business, such as laptops and computers could be classed as an expense. This is also the case for computer software such as Photoshop and Microsoft Office Suite.
It is far from ideal, but as a sole trader there may be times, especially when you are first starting out that you will make losses. When this happens make sure you note the loss you have incurred, because you may be able to expense this when you are making a profit.
If you use your phone for both personal and business use then you will need to separate out the costs that are for business to ensure that you only expense the minutes and texts that were used for this purpose.
Some sole traders find it more straightforward to have two phones, one for business use and one for personal use so that only one bill needs to be expensed.
If you work from home then you could claim the percentage of your home phone line rental that has been used for business calls.
As a sole trader your stationery costs may escalate pretty quickly, but the good news is that all your stationery from paper to pens to pencils might be able to be claimed as an expense.
The cost of any training course that you complete may be eligible to be claimed as an expense, as long as the training is essential to your business or any jobs that you are completing.
As a sole trader you are probably aware that you can claim vehicle costs including fuel, insurance and repair costs. But what about the more environmentally friendly forms of transport such as cycling?
You will be pleasantly surprised to discover that your bicycle costs could be claimed as an expense, so there is no need to worry about that punctured tyre!
If you use your bicycle solely for business use then you might be able to claim all of your bike costs. However, if you use your bicycle for both business and personal use then you could claim a proportion of your costs.
It is always a good idea to check all your claims with your accountant to ensure that they are classed as business expenses.
If you would like some more information on the expenses that you are entitled to claim as a sole trader then please feel free to contact one of the friendly accountants at Easy Accountancy who will be happy to help. Contact us on 0500 234111 / 01442 275767 or email firstname.lastname@example.org.
If you are working through a limited company then you may find these expense pages helpful:
- Top ten expenses to claim as a limited company
- Limited company expenses that you could be missing out on