Even if you have been self-employed for quite some time, submitting your personal tax return can be a difficult and stressful task. But it is important to get this right because this is where you can claim your expenses, and in effect reducing your tax bill.
Any work related expenses can be deducted against the profits of your business to reduce your tax bill, so make sure to keep hold of all your receipts, it’ll help you in the future. There are some expenses however that can be difficult to decide if it is a legitimate business expense or not, so we always advise speaking to an accountant or financial advisor.
Without further ado, below are the tips perfect for anyone self-employed:
Mileage: We all drive cars, for work or for leisure. The trips you do in your car for work can be claimed back as an expense. You can claim 45p per mile for the first 10,000 business miles for the year.
Working from Home: When working from home there is a general allowance of £4 per week. However, in some instances you can proportion the costs of working from home to your household!
Accruals: Some businesses work on credit with their suppliers, this means that they do not have to pay straight away for the goods or services. The good thing for businesses is that the work done can charged to your accounts in the current month. This could reduce your tax bill.
Trading Losses: It is not uncommon for businesses to make losses, especially in their early days, months & years. These losses that a business may have incurred can be offset against their current year’s profits to reduce their tax liability.
General Expenses: You would be surprised how many of the self-employed and small business owners do not realise what you can and cannot claim as a business expense. Some just do not claim at all! So we will always recommend at least speaking to an accountant or financial advisor to set you on the right path.
Thanks for reading this post, we hope you were able to learn some useful information. If you ever need help with financial services such as your tax returns then we are available to help. Please click here and complete the form or email us at contact@atroaccountancy.co.uk and we will get back to you as soon as possible!