Knowing exactly what you can and can’t claim for on your tax return can be quite confusing. It’s also easy to miss things if you don’t know about them!
In our series of self employed guides, here are 3 of the most common expenses explained…..
Business assets are things which are purchased for the intention of using them in your business for the long term. Prime examples are laptops and other tech, printers/scanners, and mobile phones (because let’s face it, an iphone is basically just a very small computer).
These can all be claimed, but through a slightly different method called Capital Allowances.
The important fact is that they were bought for use in your business. It is entirely possible that you will only have one laptop, and therefore there will be times where it is used personally. This doesn’t stop you from including it in your business accounts, it just means that an adjustment needs to be made for the ‘personal use’ aspect. If you use the laptop 50% of the time for online shopping and kids homework, then 50% of the purchase cost will need to be disallowed.
This one gets a lot of attention, and your local ‘tax expert taxi driver’ will have a variety of opinions on it!
Home Phone – if you run your business from home and use the landline then, assuming the landline already existed before you started running your business, there is nothing specific to claim. The business is not incurring any costs. If however you have had to take out a minutes subscription or other upgraded features on the line specifically due to the new business use, then that is entirely claimable. If you had to get the landline installed because of the business then the whole cost is claimable because it didn’t exist before.
Mobile Phone – there probably isn’t any business currently running without the use of a mobile phone these days. We would always recommend to take out a new contract with a new phone that is specifically for business use, this means the entire cost is claimable, and it also means you get to keep your personal phone number personal. It means you can switch it off on Sunday. Business burnout is something we’ll cover in a future article.
If you do end up sharing a mobile with work/personal use, then same as the laptop example before, what percentage of your time is spent on the phone for work use – this will be the claimable amount.
Another divisive one here that causes a lot of confusion and disagreement!
Protective clothing/equipment is absolutely fine, so if you need steel toe cap boots, or a hi-vis jacket etc for your business then this is definitely claimable. If you purchase branded uniform for yourself and/your team, then this is also claimable and could potentially cover things like tops, overalls, jumpers.
Trainers are never claimable, sorry, but they’re not. We see a lot of hopeful receipts for trainers!
General clothing, despite what you may have heard, is not claimable. This covers taxi drivers who want to claim trousers, mortgage advisors who want to claim suits, removals men who want to claim trackie bottoms, and everyone else on the planet who wears general clothes to work. HMRCs stance is that these clothes are not essential for your job; you are wearing them because humans are required to wear clothes, and they could just as easily be worn while you’re doing the weekly shop at Tesco’s as they could to work.
We hope that this guide has been helpful for you. Please contact us for support with your expenses and tax returns.
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