Sole Trader’s Expenses: The Sole Truth
We’ve already had a good look at claiming as expenses as a limited company here, and we’re not going to leave you Sole Traders out in the dark. You’re important to us too you know!
Why Should I Claim Expenses?
The answer might sound a little bit strange to you at first: It reduces your profits. ‘But don’t I want to increase my profits? Not reduce them!?’. Well of course, yes. But if you’re spending money on expenses then you are going to want the tax relief that you are entitled to on those expenses.
That tax relief means that if your business costs you – you’re allowed to use them to reduce your profits so the tax you’ve got to pay is reduced too.
What Can You Claim For?
It’s not too different to being a limited company when it comes to claiming back business expenses.
For an expense to qualify it’s got to be ‘wholly and exclusively’ for the performance of your duties. Basically, if you need something to run your business, and it’s only for your business, then you can claim for it.
It’s not always that simple though. If you use a phone 50% of the time for personal and 50% of the time for business use, you can claim 50% of the bill as a business expense. There are more, complicated, scenarios too. Check out a few other expenses you can claim for:
- Business Mileage
- Accountancy fees
- Accommodation when on business travel
- Office consumables like pens, paper and printer ink
- Working from the home office (there’s a flat rate depending on how many hours you work)
- Training courses
- Sustenance when travelling for business
There is a lot more you can claim for too and we’d love to help you out – claiming the right amount for expenses can really make a difference to your take home pay. Get in touch with us now to find out more.