22
Feb, 2019

Self-Employed Expenses

Expenses for the self-employed an be a bit of a minefield, especially if you have recently set up our business and are dealing with lots of new and exciting things!

 

So what we need to know is what can we claim for and what can’t we claim for. Please note different rules apply to traditional accounting and cash basis accounting, there are detailed accordingly below.

 

 

Traditional Accounting

 

Any cost you incur while running your business is a business expense. Some things you will need to claim for as an allowable expense and some things you will need to claim for as capital allowance. The general rule is that if you will make use of what you are purchasing for more than two years it is claimed as capital allowance and if it will last less it is an allowable expense.

 

Examples of purchases that can be claimed as capital allowance are:

  • Office printers
  • Cars
  • Legal costs incurred when buying property or vehicles

 

Examples of purchases that can be claimed as allowable expenses are:

  • Office stationary
  • Petrol
  • Travel (excluding travel between home and work)
  • Insurance
  • Legal Fees (excluding legal fees incur when buying cars/ property)
  • Bank charges
  • Work uniforms
  • Staff wages & benefits
  • Materials

 

 

 

Cash Basis Accounting

 

Any cost you incur while running your business is a business expense. Some things you will need to claim for as an allowable expense and some things you will need to claim for as capital allowance.

 

Examples of purchases that can be claimed as capital allowance are:

  • Cars (unless you are using simplified expenses)
  • Legal costs incurred when buying property or vehicles

 

 

Examples of purchases that can be claimed as allowable expenses are:

  • All office costs
  • Petrol
  • Travel (excluding travel between home and work)
  • Insurance
  • Legal Fees (excluding legal fees incur when buying cars/ property)
  • Bank charges (only up to £500 can be claimed)
  • Work uniforms
  • Staff wages & benefits
  • Materials

 

Expenses you can’t claim as a business expense

 

You cannot claim for:

  • Non-business use of your office
  • Parking / Speeding fines
  • Clothes for work that are not required for safety reasons or are not uniforms
  • Entertaining Customers
  • Paid networking events

 

 

You can view a more detailed list on the HMRC website here.