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Self Assessment - Allowable Expenses

Updated: Jan 27, 2023

If you are self employed and receive any income though dividends, shares or savings you have to submit a self assessment tax return. Self Assessment is a system used by HM Revenue and Customs (HMRC) to calculate tax on your income and should be filed by 31st January every year.


Allowable expenses should be included in your tax return to ensure the correct tax liability is submitted.


What are allowable expenses?

There are a number of business costs that are not taxable – these are called ‘Allowable expenses’. Allowable expenses are essential operating costs and are not considered part of a company's taxable profits.


What allowable expenses can you claim?

  • Office supplies: stationery, internet or phone bills.

  • Office equipment: computers, laptops, printers.

  • Business premises: rent, business ratee, insurance, maintenance and security

  • Business travel costs: car rental, hotel costs, train or bus fares.

  • Car and van: fuel, parking, repairs and servicing, vehicle insurance, breakdown cover.

  • Business clothing expenses, e.g. uniform, safety clothing

  • Staff costs, e.g. salaries or subcontractor costs.

  • Stock or raw materials.

  • Legal and professional costs

  • Training courses to improve skills and knowledge in your business.

  • Marketing and sponsorship

  • Website and advertising costs

Working from home

If you work from home, you can still claim expenses such as heating, electricity, council tax, rent, internet and phone usage. However, you can only claim for the proportion of these utilities that you use for your home office.


Pensions

You can also claim tax relief in your Self Assessment tax return if your pension scheme is not set up for automatic tax relief.

You can claim additional tax relief for money you put into a private pension of:

  • 20% up to the amount of any income you have paid 40% tax on

  • 25% up to the amount of any income you have paid 45% tax on

Source: HMRC

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