What Expenses can I Claim as a Sole Trader?

(2 minutes to read)

A great benefit to working as a sole trader is that you’ll be able to claim back on a wide range of expenses.

Being self-employed, you’ll need to pay out for various costs to carry out your work, from travelling to buying equipment.

And best of all, these expenses can be used to reduce your tax bill at the end of each year. Obviously, you can’t just claim back on anything and everything you like – HMRC definitely won’t accept an all-inclusive luxury holiday as a legitimate work expense!

You just need to ensure that each purchase you wish to claim has been made ‘wholly and exclusively’ for business purposes.

What expenses can a sole trader claim?

Typical allowable expenses for a sole trader working outside of IR35 include:

  • Travel costs – such as fuel, parking, hire charges, train/bus/taxi/airfares and accommodation while away for business reasons.
  • Office costs – such as stationery, printer ink/cartridges, postage and phone/mobile/internet bills.
  • Clothing expenses – if you require specific protective wear, a uniform or a costume.
  • Financial costs – such as hiring an accountant.
  • Training courses – but they must be related to your current line of work.
  • If you work from home, you may be able to claim a proportion of costs for your heating, electricity, Council tax, mortgage interest/rent and internet/telephone use.

There’s also the option to use simplified expenses – some people prefer this method as it means you can calculate some of your expenses using flat rates instead of having to work it all out individually.

You can apply the flat rate method to:

  • Some vehicles, such as cars used for non-commercial use, motorcycles and goods vehicles.
  • Working from home.
  • Living in your business premises.

How do you claim an expense?

You or your accountant will be able to claim expenses via your self-assessment tax return.

It’s worth keeping a note and records (especially with expensive purchases) of all your expenses – you don’t need to provide proof; however, you could be questioned by HMRC should they have concerns about what you’ve been claiming for.

Do I need an accountant?

Often, self-employed professionals prefer to hire an accountant to help them out with business-related tasks, such as filing and sending off their self-assessment tax returns.

An accountant can also be really handy for making sure that you’ve included all the expenses that you are able to claim back for – possibly making you aware of some you might not have thought of yourself.

Key questions to consider when looking for an accountant are:

  • Do they specialise in contractor tax?
  • Will I have my own dedicated accountant?
  • Are they qualified?
  • Do they have a fixed monthly amount?
  • Have they got a good reputation?

Dolan Accountancy

With years of experience, Dolan Accountancy provides just about everything you need in an accountancy company, all wrapped up in one low-fixed monthly fee.

Award-winning, Dolan Accountancy offers a combination of experience and great service and is both fully FCSA accredited and an APSCo Trusted Partner.

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Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £105 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of Contractor Umbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.
  • Same day payments- We offer same day payments as standard providing funds are received into our account by 9am, for no additional fee.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.