The following expenses can reduce you taxable profits if you are self-employed:
- Cost of goods bought for re-sale, cost of raw materials used; direct costs of producing goods sold; adjustments for opening and closing stock and work in progress; commissions payable; discounts given. Taxi and mini-cab drivers and those in the road haulage industry should include fuel costs here
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- Construction industry subcontractor payments (before taking off any tax).
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- Salaries, wages, bonuses, pensions, benefits for staff or employees; agency fees, subcontract labour costs; employer’s NICs etc.
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- Car and van insurance, repairs, servicing, fuel, parking, hire charges, vehicle licence fees, motoring organisation membership; train, bus, air and taxi fares; hotel room costs and meals on overnight business trips.
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- Rent for business premises, business and water rates, light, heat, power, property insurance, security; use of home as office (business proportion only).
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- Repairs and maintenance of business premises and equipment; renewals of small tools and items of equipment.
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- Phone and fax running costs; postage, stationery, printing and small office equipment costs; computer software.
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- Advertising in newspapers, directories etc mailshots, free samples, website costs.
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- Interest on bank and other business loans; alternative finance payments.
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- Bank, overdraft and credit card charges; hire purchase interest and leasing payments; alternative finance payments.
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- Amounts included in turnover but unpaid and written off because they will not be recovered.
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- Accountant’s, solicitor’s, surveyor’s, architect’s and other professional fees; professional indemnity insurance premiums.
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- Depreciation and loss/profit on sale of assets are NOT allowable.
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- Trade or professional journals and subscriptions; other sundry business running expenses not included elsewhere; net VAT payments.
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When filing invoices, remember to note any apportionment on them between personal and business expenses. Always keep proof of payments (receipts, bills payments) for any expenses incurred in course of business.
