Tax accountancy support made for sole traders

Self-employed business expenses are your running costs. Some of these costs will be classed as ‘allowable expenses’ by HMRC. These can be deducted from your tax bill, so you’ll be taxed on the remaining profit once these have been taken off.

You might be wondering, ‘what can I claim as self employed allowable expenses?’ Allowable business expenses for self employed people typically include things like office supplies and equipment, business travel and job-specific training.

For an electrician, that might look like purchasing a work van and fuel to travel to clients. For an Etsy seller, that could mean buying packaging that keeps your products safe on their journey to customers.

Getting your allowable expenses right matters. Say your annual turnover is £65,000, but you claim £10,000 in allowable expenses. You’ll be taxed on the remaining £55,000 instead of £65,000.

It’s also important not to overclaim business allowable expenses. If HMRC has reason to believe you’re hiding your true profit, you could face an investigation and a penalty.

Claiming the right allowable expenses means you also pay the right amount of tax. Your self-employment tax bill is calculated based on your taxable profit – not your total turnover. So claiming the right amount of allowable expenses can reduce your tax bill.

But it’s not just about tax. Business allowable expenses for self-employed people can include things like professional development courses and training. So you can use your allowable expenses to forward your career and improve the skills that make your business thrive.

The 31st of October for paper returns and 31st of January for online returns.

If you miss the deadline, you will immediately receive a £100 penalty from HMRC. If the return is still not received within three months of the filing date, you will be charged £10 a day (up to £900). If it is still not received by six months (31st July), you will receive an additional £300 penalty, and a further £300 penalty is also charged after 12 months. Please be aware that interest will also be due on top of these penalties made by HMRC.

Yes, you need to keep your business receipts as we or HMRC may carry out checks to support your tax return.

HMRC can charge you a penalty if your records are not accurate, complete or readable.

Allowable expenses for self-employed people are divided into lots of different categories. These include:

• home office
• travel and transport
• office supplies and equipment
• professional services
• staff expenses
• marketing, advertising, and branding
• training and professional development

It’s important to get your self-employed business expenses right. Claiming for the wrong expenses could land you in hot water with HMRC, but then again, failing to claim your allowable expenses could mean you pay more tax than necessary.

Expenses if you're self-employed: Overview - GOV.UK (www.gov.uk)

A UTR number is a unique taxpayer reference number. It is 10 digits long, and you are given one by HMRC when you register for self-employment.

You usually pay 2 types of National Insurance Contributions (NICs) if you’re self-employed, Class 2 and Class 4. For further information click here

You don’t need to send proof of business expenses when you submit your self-employment tax returns. But you do need to keep proof and records of your expenses just in case HMRC asks to see them.

A self-employed individual is required to keep their records for at least 5 years after the 31st January submission deadline for the relevant tax year.

Example: 2022/23 tax year, due by 31st January 2024 – records must be kept to 31st January 2029.