What Expenses can I Claim as a Sole Trader?

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?

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