What self-employment offers in excitement, freedom and adventure is balanced out by the mind-bending tediousness of filling out a tax return! It has to be done though, and as soon as you start making money while working for yourself, you need to register as self-employed with the tax office. And, if you fail to get your tax return in on time at the end of each financial year, you may be forced to pay a penalty. For details of these penalties, why not read “Self Assessment Tax Penalties” here. On the bright side, it is likely that you will be able to claim a certain amount of tax-free business-related expense every year, which may save you a substantial amount of money in tax.
Here’s how it works. You can claim tax relief for a lot of different business spending and, although the system of what is and is not allowed is rather complex, it means that business owners can get support in the most important areas of their work. For example, the system as it stands at the moment allows you to receive tax relief on purchases of:
- The tools of your trade, including cars, vans, tools, etc. (and also computers);
- Improvements in the Workplace – that is, putting up shelves and so on;
- New premises (sometimes – check the more detailed rules about this);
- Fuel expenses;
- Utility expenses…
…amongst other things!
So if you run a business, and you think you may be able to claim expenses on any of the things above (or anything else), you simply need to include all of the information about your business expenses on your next tax return. You may need to start holding on to your receipts, but it will be well worth it when you receive a tax rebate! All of the information about your expenses can be included in the self-employment pages of your tax return.
The information you have to collect about your business in order to complete your tax return should contain records of any time money passed into or out of the business, and it needs to be stored for 5 years. If you are not already keeping all the necessary records for your business, you may also want to take a look at the advice here:
For more details about tax relief and expenses, you can check out the official HMRC site. From here, you can link to all kinds of more specific information that you may find useful.
Any more questions? We are happy to help. Alternatively, why not apply for some expert help with your tax return?
Disclaimer: The above information can not be taken as advice and is for illustration purposes only. Please call Tax Fix before making any claims or confirmation. Tax Fix can not accept any liability for action taken and any losses incurred.