There are lots of advantages to being self employed, you can often set your own hours of work, you don’t have a boss to answer to and you can exert better control over your income. One of the potential downsides is that there is some administration involved, specifically you’ll need to complete a self assessment tax return.
Some self employed individuals might also feel that the costs of running their business undermine their profit margins. Many of these people are unaware of two things, firstly that there is plenty of tax help out there and secondly that you can claim various expenses to off-set your business profits.
But what expenses are allowable?
The cost of your stock is an allowable expense. Lots of businesses obviously involve purchasing products and then selling them on, the cost of buying stock for your business is tax deductible.
The cost of your business premises is also tax deductible. This includes if you work from home, where some part of your rent, heating or electricity bill can be considered an allowable expense.
A common expense pertains to travel costs. When you’re going to meet clients etc you can claim some portion of your petrol costs or travel costs.
Your business might have various admin costs, for instance if you have to make phone-calls or market your company. These costs can be considered allowable expenses.
