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Self-employed expenses: what you can and cannot claim - Infographic copy

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In 2014, self-employed workers in the UK made up 15% (4.6 million people) of the country’s overall work force. Whether you consider yourself self-employed, a sole trader or freelancer you are able to claim as an expense the costs that are solely and exclusively for your business.

But what qualifies as a business expense?

Take a look at our frequently asked questions to see what expenses you could claim from your usual day to day purchases.

Don’t forget that all expenses should be discussed with your accountant to ensure that they are a valid claim.

Can claim

Can I claim mileage if I use my car for business travel?

If you use your car for business purposes you can claim 45p per mile for the first 10,000 miles travelled, and then 25p per mile thereafter.

To claim mileage if you are self-employed and do not operate through a limited company you can claim per mile or for a proportion of usage. If you choose to claim for a proportion you will first need to calculate the total yearly cost of running your car including fuel, insurance, repairs etc. Then you will need to determine the percentage of miles that were for business and apply this percentage to the total running cost. The number that you are left with is the amount that you can expense. 

I have just brought an iPad can I expense the cost?

If you use your iPad exclusively for work the cost could be claimed as an expense. Similarly you could claim for software, computers or laptops if they are used exclusively for business purposes.

Can I claim the cost of my lunch?

If you are not at your usual place of work you might be entitled to claim meal costs, this is usually up to a value of £5.

If I use my personal mobile phone for business, what am I entitled to claim?

Over 93% of the UK population use a mobile phone. Remember! You can only expense the % of minutes and texts that are used for business purposes.

Can accountancy fees be claimed as an expense?

The cost of some professional fees such as insurance, legal costs or accountancy services may be classed as an expense.

Can’t claim

Can childcare costs be paid through my business?

Unfortunately childcare is not a business cost and cannot be claimed as an expense.

I have purchased a new suit to wear to a business meeting. Can this be claimed as an expense?

Clothing that could be used as part of your everyday wardrobe such as a suit or business dress is not classed as an expense. However, if your work requires protective clothing or branded uniform, such as a hard hat or a beautician’s tunic this cost could be classed as an expense.   

Can speeding fines be paid through my business?

Parking fines or speeding tickets are not related to the running of your business and cannot be claimed as an expense, even if the fine is incurred on a business trip.

I made a donation to my client’s favourite charity. Can the donation be claimed as a business expense?

Charitable donations are not related to the running of your business and so cannot be claimed as an expense, but speak to your accountant to see if you are eligible for tax relief.

Can the cost of medical treatment be claimed as an expense?

With the exception of eye tests, medical costs can rarely be claimed as an expense unless it can be proved to be essential to your business.

I have two children who attend an independent school. Can I expense their school fees?

The cost of your child’s schooling is not directly relevant to the running of your business and so cannot be claimed as an expense.

My client is in Aberdeen, but I live in London. Can my business pay for my hotel?

If your business requires you to stay away from your permanent address you could claim reasonable hotel costs as long as you keep your receipt.

If I work from home, can my business contribute towards the household bills?

If you work from home you could claim a proportion of your household costs or a flat rate of £4 per day.

Is the cost of an eye test classed as an expense?

If your work requires you to use a computer you could claim the cost of an eye test as an expense.

I want to look my best for a meeting. Can the cost of my makeup be claimed as an expense?

Makeup is generally not classed as a business expense. If you work as a children’s entertainer and use makeup as part of your costume then this would be a unique case and the makeup cost could be expensed. 

Can gym membership be classed as an expense?

Gym membership fees cannot be claimed unless it can be proved to be essential to your business. An example of when gym membership could be claimed is in the case of a professional athlete or acrobat.    

How can Easy Accountancy help you with your expenses?

  • All our clients have unlimited access to your own dedicated accountant without any extra charges. So we can answer any questions that you may have on what can and cannot be claimed as an expense.
  • We can help you complete your personal and business yearend tax return and make sure you are claiming all the expenses that you are entitled to.
  • Easy Accountancy provides a low cost, all-inclusive, fixed fee accountancy service starting at just £60 per month.

Don’t forget…

  • All expenses must be solely for business use and HM Revenue & Customs may ask you to provide evidence of this i.e. you must have actually incurred the expense.
  • Whether you prefer to keep a physical copy or a digital copy make sure you keep your receipts as HMRC can request to see them anytime during the 7 years after the expense was incurred.
  • Expenses are deducted from your annual turnover and as you are only taxed on your turnover, the larger your expenses bill the lower your tax bill will be. However, don’t forget that even though expenses are tax deductible they are still a cost coming out of your profits, so only buy items that you actually need.  
  • Don’t forget that all expenses should be discussed with your accountant to ensure that they are a valid claim. 

If you would like some more information on what expenses you can claim if you are self-employed, our friendly accountants at Easy Accountancy will be happy to answer any of your questions. Please get in contact by calling 0500 234111/01442 275767 or by emailing lovely@easyaccountancy.co.uk

Alternatively, if you’re a construction worker or mechanic with questions about what you can and cannot claim expenses for then our sister company, Brian Alfred, can help. Brian Alfred is one of the UK’s leading CIS and PAYE tax rebate specialists who have helped thousands of people get the maximum tax rebate in the quickest time. For more information visit the Brian Alfred website

For more information on self-employed expenses you may also find these pages useful:

Why Clients Choose Easy Accountancy

Easy Accountancy offers a low cost, fixed fee accountancy package with all clients receiving their own dedicated, friendly, approachable accountant.

All of our accountants specialise in providing accountancy services to the self-employed, freelancers, sole traders, small to medium sized limited companies and private individuals. All accountants are employees of Easy Accountancy and we never outsource or offshore work.

Our low cost, all-inclusive fixed-fee accountancy service includes unlimited access to your own dedicated accountant throughout the year and covers all your business and personal tax affairs needs.

All our accountancy services include:
  - Unlimited access to your accountant
  - Ongoing advice on how to manage your business
  - Proactive tax advice throughout the year
  - Updates and reminders so you'll never miss a deadline
  - Free bookkeeping software

As a sole trader our fees start at just £60 + VAT a month, for this you receive the above plus:
  - Completion of your Self-Assessment tax return
  - Advice on how much Income Tax to pay
  - Guidance on National Insurance contributions

As a limited company our fixed fee packages are bespoke to your needs, however typically you’ll receive the above, plus:
  - Completion of your year end accounts*
  - Completion and submission of your annual return Companies House
  - The director/s Self Assessment tax return
  - Payroll bureau
  - Dividends and corporation tax computations

We’ve saved our clients up to half on their accountancy bills – if you’d like a quote, click on the quote me button to the right of this page. Alternatively, call us on 0500 234111 / 01442 275767 or email heather@easyaccountancy.co.uk.

*If you would like us to complete your company year end accounts we simply ask that you have been a client of Easy Accountancy for one year or have made 12 monthly payments.