What are allowable expenses for the self-employed?


As a freelancer or self-employed you can deduct certain expenses from your turnover when submitting your self-assessment tax returns. This leaves you with your taxable profit.

You can’t just deduct anything though, the expense has to be related to your business and HMRC has rules around what can and cannot be included as an ‘allowable expense’.

We’ve listed below some of the business expenses that you can deduct from your profits when completing your self-assessment tax return.

Office costs
Anything that you need to run your business counts as an allowable expense. This could include things like stationery, printing costs, and postage. You may also be able to include office equipment such as
printers and computers, but check first that this isn’t classed as capital allowance.

Office overheads
If you run your business from an office you can deduct rent, utility costs, maintenance, repairs and insurance as an allowable expense. You cannot claim for buying or building an office.

If you work from home you can claim a portion of your home utility costs. This depends on how many hours you spend working from home. Use the HMRC Simplified Expenses Checker to work out what you can claim.

Travel expenses
If you use a vehicle for business travel you can claim costs for car insurance, fuel, car hire, and repairs.

If you travel by train, plane, bus or taxi you can include those costs as an allowable expense, as well as expenses for hotel rooms and meals for any overnight business trips.

Uniform
If you have to buy uniform or protective clothing for yourself or your employees you can claim, but not for any regular everyday work clothes.

Marketing expenses
Any costs associated with marketing your business can be claimed as an allowable expense on your tax return. This includes things like building your website, newspaper advertising and direct mail shots.

Salary costs
Salaries, pension contributions, benefits, bonuses and National Insurance contributions all count as allowable expenses.

Accountant and solicitor costs
If you use an accountant or solicitor for your business you also can include these costs in your calculations.

In order to calculate your business expenses for your tax return, work out all your expenses individually, and keep a record of your workings. You should also keep any receipts and invoices in case HMRC have any queries.

If you need any help filing your self-assessment tax return, feel free to get in touch with us here at Magpie Accountancy.