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Business founders/entrepreneurs

Self employed - what kind of business expenses do you claim for/document?

36 replies

Comfysock · 26/01/2024 17:04

All new to me, just started out. No office working freelance from home marketing and PR. By ApriI I know I will have gone over £1,000 threshold for tax. So far Im wondering if I can claim.for:

I took a client for lunch it was a working lunch to discuss a project. I paid cash but have a receipt

Have a breakfast meeting booked this weekend for a potential new client. Can I claim for this if I pay?

Petrol and mileage - although car isnt registeted/insured for business use...commute to, and for social domestic pleasure

Printer ink cartridges, I need to buy for work useage

What else can I document for work, I dont habe a clue!

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123ZYX · 26/01/2024 17:08

Business expenses have to be"wholly and exclusively" for business purposes so it sounds like your meals likely would be.

Mileage can be claimed as a tax deduction up to 45p a mile for business usage - I'm concerned you don't have appropriate insurance cover though

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Sonora25 · 26/01/2024 17:08

I claim for 0.45p per mile for driving to meetings. Definitely claim for meeting expenses like lunches, coffee, train tickets, parking etc.
i also claim for printer cartridges, printer paper, all stationary (pens etc), chargers, subscriptions and work related books, there is an allowance for working from home, I claim for my mobile phone (account said I can claim full bill).
under separate tab you can claim Charity gifts and pension contributions.

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123ZYX · 26/01/2024 17:09

Just to add - keep a record of everything that might be and ask your accountant to review - it's easier to remove things you can't claim for than suggest what's not there

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Sonora25 · 26/01/2024 17:10

You are not using your car for business unless you are a delivery driver or taxi!! You don’t need different insurance.

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Sonora25 · 26/01/2024 17:11

I spend £300 a year on an account and so worth it! He told me lots of things I wouldn’t have claimed otherwise. It all adds up, parking for meetings, work related books, etc

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PickledPurplePickle · 26/01/2024 17:12

Entertaining clients / prospects are not allowable costs

Mileage for business trips, yes. You need to get your insurance changed to include business use

Postage, stationery, yes

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Lordofmyflies · 26/01/2024 17:14

Lots!
I claim for a % of heating and electric decided on by the area of room I use for business to the house.
Work clothing and 2 pairs of shoes a year.
A % of laundry costs.
Stationary for work
Advertising for work
Internet / mobile/ phone line for the business
Professional fees and insurance

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FKAT · 26/01/2024 17:14

Get an accountant and they will tell you. Things like a % of your broadband and mobile can be claimed.

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Comfysock · 26/01/2024 17:17

PickledPurplePickle · 26/01/2024 17:12

Entertaining clients / prospects are not allowable costs

Mileage for business trips, yes. You need to get your insurance changed to include business use

Postage, stationery, yes

I will be self assessing as income Im forecasting will be oeanuts as in about £3,500

So my client who I had a business meeting with over lunch...I cant claim for food only 45p per mile parking was free.

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Sonora25 · 26/01/2024 17:18

Lordofmyflies · 26/01/2024 17:14

Lots!
I claim for a % of heating and electric decided on by the area of room I use for business to the house.
Work clothing and 2 pairs of shoes a year.
A % of laundry costs.
Stationary for work
Advertising for work
Internet / mobile/ phone line for the business
Professional fees and insurance

i have work clothes that I need dry cleaned (not a uniform). Can I claim dry cleaner or only for uniform?

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Bargello · 26/01/2024 17:18

You basically have a choice.

You can either claim a £1000 "trading allowance" which reduces the amour liable for tax. So if you earn £6k, you're only taxed on £5k.

OR you can itemise all of your legitimate expenses and claim those.

You will need advice on the best options for you. There are lots of implications to claiming a percentage of bills as you may need a dedicated home office space, may have to inform your insurer etc etc etc. Personally I think that if you're just earning marginally over the £1k, just claim the trading allowance.

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Comfysock · 26/01/2024 17:21

Lordofmyflies · 26/01/2024 17:14

Lots!
I claim for a % of heating and electric decided on by the area of room I use for business to the house.
Work clothing and 2 pairs of shoes a year.
A % of laundry costs.
Stationary for work
Advertising for work
Internet / mobile/ phone line for the business
Professional fees and insurance

So I work 1 day a week from home freelance so nothing major!

Im thinking:

My mobile I use for calls
I definitely need internet
I work in my kitchen - so Im guessing % on electricty
I do need printer cartridges and some stationery items
I also need more memory on my laptop

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Sonora25 · 26/01/2024 17:21

@Comfysock I do claim all my business meetings (coffee/lunch etc) my account never said anything in 3 years. It’s not entertaining clients, they are meetings and have ti happen in a cafe as I don’t have an office.

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MarzipanDildos · 26/01/2024 17:23

You can only claim for clothing if it's a uniform or Ppe eg safety boots or a costume that is necessary for the job. You can't claim for everyday clothes and shoes even if you wear them for work.

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MarzipanDildos · 26/01/2024 17:25

You also can't claim for coffee at a meeting legitimately. An accountant might process it but if you're audited it would be discounted.

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Kazzyhoward · 26/01/2024 17:27

Comfysock · 26/01/2024 17:21

So I work 1 day a week from home freelance so nothing major!

Im thinking:

My mobile I use for calls
I definitely need internet
I work in my kitchen - so Im guessing % on electricty
I do need printer cartridges and some stationery items
I also need more memory on my laptop

You claim a proportion of those costs, and just claim the business use proportion on the most appropriate basis. If say, your printer cartridges are used 50:50 between business and private use, you claim half. You follow that principle for everything with "dual" use.

As for business meetings, you can claim reasonable subsistence, such as tea/coffee and biscuits, but not for full meals, which would be regarded as entertaining which is not allowable for tax.

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GingerIsBest · 26/01/2024 17:31

You should definitely be claiming for travel and phone.

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Kazzyhoward · 26/01/2024 17:31

You can't claim laundry/dry cleaning for "normal" clothes even if you only ever use them for work. You can only claim for "special" work clothes, such as logo'd uniform, safety clothing, etc.

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Comfysock · 26/01/2024 17:32

Ummm bit of conflicting info re the entertaining. The Gov Tax Chat line is quite good I have used a few tumes for info...much quicker than calling...you can save the chat as wel. I may ask on.there about lunches etc. As I dont have an office and genuinely I go with the times clients say

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GingerIsBest · 26/01/2024 17:37

I think if you're self employed vs have a LTD company, the food thing might be different . But according to the link someone posted above, meals can only be claimed if travelling overnight for work, and entertaining clients or prospects cannot be claimed.

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HateMyRubbishBoss · 26/01/2024 17:39

Make sure you claim part of mortgage, council tax, bills if working from home

also you can claim either mileage or car lease, insurance, car maintenance and 50% of Vat

ive changed lots of accountants over the years and they tell you the absolute basic

if you get a proper tax advisor they give double the list of items you can claim

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Logistria · 26/01/2024 17:39

If you are providing free hospitality (i.e. food and drink) to clients it's entertaining. No tax deduction. It's irrelevant whether it's a genuine business expense or not, it's not allowed as a tax deduction.

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45000

Unless something has changed very recently, the customer service agents at HMRC are not actually tax qualified. They get a few weeks training.

Don't take tax advice from random strangers or a web chat facility. If you make a mistake because you relied on Mumsnet/webchat rather than taking qualified professional advice, it would be considered careless for penalty purposes.

BIM45000 - Specific deductions: entertainment: introduction and contents - HMRC internal manual - GOV.UK

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45000

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Kazzyhoward · 26/01/2024 17:40

Comfysock · 26/01/2024 17:32

Ummm bit of conflicting info re the entertaining. The Gov Tax Chat line is quite good I have used a few tumes for info...much quicker than calling...you can save the chat as wel. I may ask on.there about lunches etc. As I dont have an office and genuinely I go with the times clients say

Not really. £10-£20 for a drink and snack will be ignored by a tax inspector under the triviality rules on the grounds they're just not going to waste time on trivial amounts and it's just a matter of basic courtesy to have a drink during a meeting. Your half would probably be allowed as "subsistence" anyway if it was a meeting away from your normal workplace, so it's only the half for the client that "could" be challenged by a particularly pedantic tax inspector! (Of which there are very few).

However, £50-£100 for a "proper" lunch and drinks is definitely not allowable as it's entertainment. Like a lot of things with tax, context and amounts are important. Tax inspectors will concentrate on bigger things!

That's why having an accountant is important as they know the reality rather than just the theory. They have experience of the type of thing that tax inspectors challenge and the types of thing that a tax inspector will ignore on the grounds of triviality.

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Logistria · 26/01/2024 17:43

HateMyRubbishBoss · 26/01/2024 17:39

Make sure you claim part of mortgage, council tax, bills if working from home

also you can claim either mileage or car lease, insurance, car maintenance and 50% of Vat

ive changed lots of accountants over the years and they tell you the absolute basic

if you get a proper tax advisor they give double the list of items you can claim

A proportion of mortgage interest, perhaps. But not the capital repayment.

And there are potential consequences.

https://www.litrg.org.uk/tax-guides/self-employment/what-business-expenses-are-allowable#toc-i-work-from-home-what-expenses-can-i-claim-

What business expenses are allowable? | Low Incomes Tax Reform Group

What business expenses are allowable? All revenue (trading) expenses must have been incurred “wholly and exclusively” for the purposes of running the business to be allowable for tax purposes. This means that the costs must be incurred while actually p...

https://www.litrg.org.uk/tax-guides/self-employment/what-business-expenses-are-allowable#toc-i-work-from-home-what-expenses-can-i-claim-

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