Your year-end tax health check: are you missing any allowable expenses?

Article by GoSimple Tax

Whether you’re thinking about winding down this festive season or perhaps are busier than ever, the Self Assessment deadline is approaching. This means it’s never been a better time to look over your business and its numbers – and ensure it all stacks up.

One area that deserves your attention is allowable expenses. Why? Because research released by mobile business account ANNA Money found that the average self-employed individual leaves hundreds of pounds unclaimed every year – £840 to be exact.

What’s more, one in five of those surveyed complained they are simply not sure what they can and can’t claim. So, to avoid missing out on money that’s yours, keep reading to find out how you can make sure your records are complete and accurate before filing your return.

Start gathering the relevant information

Instead of going head first into expenses and filing, it pays to gather the core documents that are required for your Self Assessment. This includes:

Income records

Invoices
Bank statements
Sales records from platforms like Etsy, PayPal, Stripe and Shopify
Cash book (if relevant)

Business expenses

Receipts
Invoices
Mileage logs
Home-office calculations
Records of equipment purchases

Other income

Interest
Dividends
Rental income
Benefits or grants received

You’ll also need your Unique Taxpayer Reference (UTR) number and your HMRC sign-in details.

Check for allowable expenses

Lots of people underestimate their true business costs. Here’s a round-up of the most commonly forgotten expenses:

Home office expenses

If you work from home, you may be entitled to claim:

A proportion of rent/mortgage interest
Council tax
Utility bills
Broadband
Phone charges
Home-office equipment

You can also use HMRC’s flat-rate home-working allowance if it’s easier. And there are handy tools online to help you calculate what you could claim.

Travel and mileage

Don’t forget:

Business mileage (45p for the first 10,000 miles, then 25p after)
Public transport
Parking
Accommodation for business trips

Unfortunately, commute costs to your regular workplace won’t count. But if you are travelling to a temporary or client location, it does.

Professional fees and subscriptions

These often get missed:

Accountant or bookkeeping fees
Software subscriptions
Industry-specific memberships
Professional training relevant to your current work

Marketing and admin expenses

Website hosting and domain names
Advertising
Business cards
Office supplies
Printing, postage and stationery

Equipment and tools

This includes:

Computers
Laptops
Tools
Cameras
Office chairs and desks

When you see how many allowable expenses there are, you can understand why it’s so important to log every purchase made through your business throughout the year.

Review your records

Next up, it’s time to run through your bank statements month-by-month. Ask yourself:

Was this a business purchase I never recorded?
Do I have a receipt somewhere?
Did I use my personal card for business?

Double check the disallowed

While many expenses are allowable, others are not. This includes:

Personal spending
Clothing (unless protective wear)
Fines
Client entertainment

In short, if an expense isn’t wholly and exclusively for your business, it likely won’t qualify.

Invest in approved software

While you could manually check your accounts for allowable and disallowed expenses, there is also software that does the job for you. In fact, it’s like having a digital tax assistant that ensures your return is accurate before you file, by flagging missing expenses, checking for errors and updating your tax owed in real time.

So, what are you waiting for? Leaving everything until the 31st January deadline makes self-employment more stressful than it needs to be. Run your tax health check today and file with confidence.

About GoSimpleTax

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