Self Employed short 23 - Total allowable expenses

Watch a short YouTube clip on the What expenses can I include in my Self Assessment tax return?.

Car, van and travel expenses
Drawings and items you take for private use from the business
Purchase of new equipment
Telephone (mobile & landline)
Rent, rates, power and insurance costs
Training costs
Clothing costs
Accountancy/legal & professional fees

Car, van and travel expenses

Watch a short YouTube clip on the Claiming motoring expenses if you're self-employed.

For car, van and travel expenses you can claim:

• car insurance
• van insurance
• repairs and servicing
• fuel
• parking
• hire charges
• vehicle license fees
• breakdown membership
• train fares
• bus fares
• air fares
• taxi fares

Alternatively you can claim a mileage allowance to cover these costs. For overnight business trips you can claim hotel room costs and evening meals.

You can claim a mileage allowance for journeys wholly and exclusively for business purposes. If a vehicle is used for both business and private purposes you can claim the business percentage only and you should keep mileage records in support of your claim

Watch a short YouTube clip on the Claiming motoring expenses if you're self-employed.

You cannot claim for:

• non-business motoring costs, private use proportions
• fines
• costs of buying vehicles
• travel costs between home and business
• other meals

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Drawings and items you take for private use from the business

For drawings and items you take for private use from the business you can claim for wages paid to employees

You cannot claim for:

• any deduction for your own wages
• or any other money taken from your business for private use or purchases

Keep a record of any money you take for your own personal use from your:

• business cash
• business bank account
• personal bank account if you do not have a separate business account

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Purchase of new equipment

For purchases of new equipment you can claim tax relief for capital expenditure called an Annual Investment Allowance (AIA), if you bought equipment, but not cars, during the year. The annual amount of AIA for 2020 to 2021 tax year is £1 million.

You cannot claim AIA for cars

Cars are eligible for capital allowances, but capital allowances can be complex. If you are making a significant purchase consider taking advice over what costs are eligible for tax relief.

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Telephone (mobile & landline)

For telephone (mobile & landline) you can claim for:

• business calls
• the business proportion of line rental
• the business proportion of monthly contracts in the case of mobile phone

You cannot claim for private calls

You can only claim the cost of the business calls, so if you use the same phone for business and private calls, you should use itemised bills to work out the business use

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Rent, rates, power and insurance costs

For rent, rates, power and insurance costs you can claim for:

• rent for business premises
• business and water rates
• light
• heat
• power
• property insurance
• security
• use of home as office, business proportion only

You cannot claim for:

• costs of any non-business part of premises
• costs of buying business premises

If you work from home you should keep details of the time spent, how much electricity, gas for example has been used and the area of your home used for business. We can accept reasonable estimates where it is minor use

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Training costs you can claim for:

You can claim for the cost of training, if the purpose of the training is to update business skills or expertise.

You cannot claim for costs if the training is for a business related new skill or qualification.

Training undertaken for academic qualifications such as GCSE, A level and PhD is not allowable.

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Clothing costs you can claim for:

• protective overalls
• protective headgear
• protective gloves
• other specialised clothing

You cannot claim for the cost of ordinary everyday clothing, even if purchased for work.

Any expenditure you claim has to be made wholly and exclusively for your business.

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Accountancy/legal & professional fees you can claim for:

• accountant
• solicitors
• surveyors
• architects
• other professional indemnity insurance premiums
• Trade Body membership provided it is related to your business

You cannot claim for:

• legal costs of buying property and large items of equipment
• costs of settling tax disputes
• fines for breaking the law