Skip to main content
Cash flow, healthy cash flow
10 min read

What can I claim tax back on if I am self employed?

In this article, we’ll explore the various expenses that self-employed individuals can typically claim tax back on, including business-related expenses such as office supplies, equipment, travel costs, and professional services.

What can i claim tax back on if I am self employed?

It may be difficult to track everything that you can claim tax back on, so it is important to know what you can to legitimately reduce the amount of tax that you pay. 

Can you claim for anything you buy?

You cannot claim tax back on everything that you purchase in general, however, you can claim back on some of the costs of running your business, which HMRC refers to as allowable expenses. 

Expenses allow you to often significantly reduce your tax bill. For example, if you have a £100,000 turnover and you claim £30,000 in allowable expenses, you will only be taxed upon the £70,000 difference.

What can you claim tax back on?

To help you understand some of the things to watch out for that may be allowable expenses, here is a list of some you may come across:

Office supplies

You can claim tax back on office supplies, these can be as simple as things on your desk such as your business stationary and your laptop or PC to things around the office such as a printer with the ink and cartridges.

You can also claim for your personal items if you are using them for business use as well. For example, if you purchased a home computer in the previous tax year that is used for business, you can claim on a pro-rata basis for the cost of the device. 

Travel costs

If you are required to travel as part of your business you can claim tax back on travel costs. If you drive a car or van for work you can claim 45p off your tax bill per mile travelled up to 10,000 miles. After that, for each mile you can claim 25p back.

Alongside the travel costs you can also claim back for other expenses required for travel. This includes things such as fuel, insurance, repairs, parking, hotels and meals for overnight business trips. 

Clothing expenses

Although you cannot claim your entire wardrobe on expenses, there are certain clothing that you can put on expenses. This includes work-related uniforms, protective clothing (if required) and costumes for actors and entertainers. 

For clothing to qualify as a business expense, they have to be necessary and work-specific items of clothing, meaning you cannot buy an outfit to wear to work and claim it back if it is not required. 

 

Staffing costs

If you employ others to work for you, you can claim back on expenses associated with their employment such as: salaries, pensions, benefits, bonuses and national insurance.

Some staff costs are not seen as a permitted business expense, such as the cost of having a childminder whilst you work. 

Purchases you are selling on

If you are purchasing things to sell on, you can claim these back as an allowable business expense. Examples of this include stock that you are directly selling on, raw materials that you use to make goods that you are selling or the direct costs of producing goods. 

Business premises

If you have an office or even work from home you can claim back on your bills. However, you need to be careful if working from home to calculate it correctly as you cannot claim all of your bills back. You can claim on a pro-rata basis, for example, if you have a 4-room house, excluding kitchens and bathrooms, with one room solely used for business purposes, you can claim 25% back on your annual bills as a tax return.

If you work from home one day a week, then this also needs to be considered, as the room you are using for business purposes may be used for other purposes, such as a spare room. If this is the case, then it needs to be worked out depending on your use of the room. 

Advertising and marketing costs

You can claim tax back on the advertising and marketing costs for the business. This includes the costs for hosting and maintaining a company website, mail advertising, the cost of samples and any advertising in newspapers or directories. 

It is important to note that treating a client to a meal is not considered marketing by HMRC but rather entertaining, which you cannot claim tax back on. 

End of Article
Share this content

Brought to you by:

AAT Business Finance Basics

AAT Business Finance Basics are a series of online e-learning courses covering the core financial skills every business needs. They draw from AAT’s world-leading qualifications and will quickly build your knowledge on key topics including bookkeeping, budgeting and cash flow.

Visit partner's website

Register with Informi today:

  • Join over 30,000 like-minded business professionals.
  • Create your own personalised account with curated reading lists and checklists.
  • Access exclusive resources including business plans, templates, and tax calculators.
  • Receive the latest business advice and insights from Informi.
  • Join in the discussion through the comments section.

or