Excite

Tax benefits for self employed explained

Working for yourself has all the intangible benefits that autonomy brings but it also comes with risks because you’re not protected by the same laws that workers are covered by. If you’re sick for a day, a week or a month, you don’t get paid. It makes sense to be aware of the tax benefits for self employed workers because you should maximise your income and minimise your firm’s outgoings.
    wikimedia commons

Overview

Being self employed means that you can take advantage of a series of tax reliefs and allowance that will reduce your tax bill at year end. Running costs and expenses associated with the business can be tax deductible.

Expenses

The list of expenses is exhaustive so let’s take a look at some of the most common ones that are tax deductible. The cost of goods that you purchase to sell on when you provide a service are tax deductible. Tax on the business portion of your rent, electricity and water can also be claimed back. The tax on car or van travel expenses can be claimed back, so you’ll get something back from HMRC for the fuel you use. Stationary, phone and internet costs are also areas where tax can be saved.

Business expenditure

When you need to buy new vehicles for your business, you can save tax on the purchase. This is also a great way of putting more money in your own pocket because you could buy something that’s great for both your work and home life.

Expenses occurring for both business and personal use

You can only save the tax on expenses like fuel if the journey you’re taking is for work purposes only. Driving to town to deposit your firm’s cheques and doing some shopping for yourself at the same time technically means that the trip was a personal one. Making sure that these lines don’t blur is the easiest way of working out what’s allowable and what’s not.

United Kingdom - Excite Network Copyright ©1995 - 2017