What expenses can you claim?

Tax

Guides

for the

Self-Employed

Expenses you can claim for

 

Keeping the above general rule in mind, let's go through the types of self-employed expenses that you, as a tutor, may typically encounter:

As a self-employed person, you will incur various running costs which you can deduct from your taxable profits (provided of course that they’re allowable expenses that relate to your business activities).  The questions is - what expenses are allowable and what can you, as a self-employed person, claim as a deduction from your taxable profits? This guide will help you through this particularly tricky area of self-assessment tax.

 

The general rule

 

As a general rule of thumb, you can't claim a deduction for expenses spent on yourself for your own personal needs. For example, you can't claim for a personal phone bill or the cost of fuel for a non-business related journey. An allowable expense must relate 'wholly and exclusively' to your 'business', or in your case, your self-employed business activities. 

 

Office & Stationary Costs

Stationary

 

This can include (among others):

 

  • office equipment

  • phone, mobile, fax and internet bills

  • postage

  • stationery

  • printing

  • printer ink and cartridges

  • computer software

 

For claiming expenses for equipment, such as computer hardware, see 'Capital Allowances', below.

Working from home

 

As a self employed person you may carry out some of your work from home. You may be able to claim a proportion of your costs for things like:

 

  • heating

  • electricity

  • council Tax

  • mortgage interest or rent

  • internet and telephone use

 

You’ll need to find a reasonable method of dividing your costs, eg by the amount of time you spend working from home. We can help with all of this.

Car & Travel Costs

You can claim allowable travel expenses, for example where you have travelled to and from a place of work (excluding a permanent place of work). This can include the business proportion of:

  • vehicle insurance

  • repairs and servicing

  • fuel

  • parking

  • hire charges

  • vehicle licence fees

  • breakdown cover

  • train, bus, air and taxi fares

  • hotel rooms

  • meals on overnight business trips

Note:

 

You can't claim for:

 

  • non-business driving or fuel costs

  • parking fines 

  • speeding penalties

  • travel to and from a permanent place of employment

Professional, Accountancy & Financial Costs

Professional, accountancy and legal costs can count as allowable expenses. In particular, this may include:

 

  • agency/commission charges

  • legal fees

  • our accountancy fee

  • professional indemnity insurance premiums, if applicable.

 

 

Bank & Other Financial Charges

 

You can claim business costs for:

 

  • bank, overdraft and credit card charges

  • interest on bank and business loans

  • hire purchase interest

  • leasing payments

  • alternative finance payments, eg Islamic finance

  • Bad debts - E.g. if a customer does not pay you.

Specialist and protective clothing

You can claim allowable business expenses for:

 

  • uniforms

  • protective clothing needed for your work

  • costumes for actors or entertainers

 

You can’t claim for everyday clothing (even if you wear it for work).

Staff and other employment costs

You can claim allowable business expenses for:

 

  • employee and staff salaries

  • bonuses

  • pensions

  • benefits

  • agency fees

  • subcontractors

  • employer’s National Insurance

 

You can’t claim for carers or domestic help, eg nannies.

Marketing, entertainment and subscriptions

Marketing & entertainment

 

You can claim allowable business expenses for:

  • advertising in newspapers or directories

  • bulk mail advertising (mailshots)

  • free samples

  • website costs

 

You can’t claim for:

  • entertaining clients, suppliers and customers

  • event hospitality

Subscriptions

 

You can claim allowable business expenses for:

  • trade or professional journals

  • trade body or professional organisation membership

 

You can’t claim for:

  • payments to political parties

  • gym membership fees

  • donations to charity

Reselling goods

You can claim allowable business expenses for:

  • goods for resale (stock)

  • raw materials

  • direct costs from producing goods

 

You can’t claim for:

  • any goods or materials bought for private use

  • depreciation of equipment

Capital Allowances

You can claim tax relief for the cost of capital business assets purchased for use in your role as a self-employed tutor. This will generally include items with an expected lifespan of over 2 years, including:

 

  • computer equipment

  • cars, vans etc

  • other equipment required to carry out your trade

  • office furniture

Expenses relating to both personal and business

As a self-employed person you may carry out self-employed work in addition to working in permanent employment elsewhere. Because of this, some of your business expenses, may also have a personal use. For example, you may use your personal mobile to make and receive business calls. The cost of those particular calls will be classed as allowable expenses. It will sometimes be necessary therefore to apportion costs between personal and business and claim for the business element only on your self-assessment tax return.

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