We often get approached by Sole Traders who need some clarification when it comes to their business expenses. As a Sole Traders business finances are not classed as a separate entity from your personal finances, there can be some confusion when it comes to what you can and can’t claim for against your tax bill.

Here’s the top 5 expenses which often get forgotten about when it comes to your self assessment.

Phone Bill

You may not choose to have a separate mobile phone for your business, you more than likely just use your personal phone to make all your business calls and that’s fine! But if you do this you need to consider that you won’t be able to claim the full amount of your phone bill as a tax deductible expense. You will need to work out how much time you spend on your phone for business use. As well as calls, take into consideration emails, text messages, any apps which you use and surfing the internet for anything business related. You’ll probably find that you use your mobile phone more for business use than you do personal anyway. Work out the time as a percentage and only claim for the amount of time you use for business reasons. For example if your mobile phone bill is £30 per month and you use it 80% for business use then you can only claim £24 per month. 

Mileage

You’re probably already aware that you can claim back the cost of a train or a plane, taxi or bus. But are you aware that you can also claim business mileage? Even if you don’t have a company car, you’re entitled to claim back 45p per mile for the first 10,000 per year and 25p per mile for anything over 10,000 miles. In order to do this you must keep a record of the journey’s you make, the start and end postcodes, the reason for the journey and the date.

You can even claim for journey’s which are made by motorbike or bicycle too. 24p per mile for a motorbike and 20p per mile for a bicycle regardless of the mileage total.

Software

You more than likely have multiple software platforms which you use on a daily basis to run your business. All of these software subscriptions can be claimed as an allowable expense unless they are a lifetime subscription. Whether you pay monthly or annually you can take this expense into consideration when filling out your self assessment. 

Training

Keeping your knowledge up to date is wise in business. Providing the training is relevant to your industry and line of working then it’s classed as a tax deductible expense. This rule also applies to business coach fees and memberships, again providing they are not lifetime subscriptions. So invest in your self development, not only will it benefit your business it will also take a chunk off your tax bill too!

Bookkeeping Fees

Hiring a bookkeeper is a great way to get back in control of your finances. The more accurate and up to date your bookkeeping is the better decisions you can make for your business. A bookkeeper is an investment for your business. We can help you to save money on your tax bill and even our fee is an allowable expense too! Win win!