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Self employed tax advice: what expenses can you claim for?

You wouldn’t have thought HMRC would have structured an element of give and take into the self assessment tax process, but low and behold, they have. As well as taxing your income, HMRC also allow the self employed to offset certain purchases, which are necessary in the course of business, against tax. You are of course limited in just how many tax breaks you can claim, but here are seven items you can certainly claim for.

Household bills

If you use your home as the base from which you conduct your work, you can claim a proportion of your household bills, including gas, electricity, water and council tax, against your tax bill. The amount you can claim is calculated in a simple way. If your home office accounts for 10 per cent of your household space, then you can offset 10 per cent of your household bills against tax.

Interest on your mortgage

The interest payable on your mortgage repayments is another household expense which can be claimed for. As above, this is calculated on a pro-rata basis, so if 10 per cent of the household is used as an office, you can claim 10 per cent of your interest payments against tax.

Your computer

If you have purchased a computer which is used solely for the purposes of your work, you can offset its cost entirely. However, and perhaps unsurprisingly, if you only use the computer for work purposes half of the time, you will only be able to offset half the cost.

Broadband/phone

The cost of every business call you make can be offset against tax. For personal calls this tax break does not apply; however, a proportion of the cost of line rental and broadband connection can be claimed on a pro-rata basis.

Clothing

If you require specialist clothing to be able to perform your job safely then you can claim for clothing used solely for work purposes. So in practice, if you work as a freelance graphic designer and require a suit for the purposes of your job, you would not be able to claim. However, if you work as tree surgeon, you would be able to offset the cost of all your protective gear.

The £104 guaranteed deduction!

Even if you only use your home very minimally in the course of your work, maybe for something as simple as writing up your business records, HMRC will still grant you a £4 per week office deduction.

Entertaining

Oh if only. Unfortunately entertainment is a complete no go, even if you spend the entire time discussing work. Sorry!

For further self employed tax advice, keep an eye on the taxdoctor blog. We will provide you with weekly hints and tips, and if you’d prefer to hand over the reins of your self assessment tax obligations, we provide a tax return service for a fixed cost of just £99.