Tax allowances for self-employers in the UK
If you are self-employed in the UK, the most interesting things connected with tax payments are tax allowances. There are plenty of things you can get off your taxes. Your own business is inseparably related to a lot of expenses that you have to incur. As long as such expenses are allowable expenses, you can deduct them and save more money. Tax allowances are purely based on your trades. Keep in mind that any money you spend on your private purchases is not included into allowable expenses. Allowable expenses are only those costs incurred for your business profits. Everything what you need you in your business can be allowable expenses, for instance, equipment, machinery, business vehicles such cars and lorries. Undoubtedly, you buy items which can be used both for private and business purposes. However, you can only deduce those part of costs connected with your business, for instance, your mobile bill for the year is £180. If you spent £100 of this bill on your private calls, then you can claim for £80 of your business expenses.
Those freelancers who work form their homes have a lot of opportunities to reduce their expenses. Allowable expenses can be also heating, electricity, internet and telephone use, mortgage interest, mortgage rent or Council Tax. Nevertheless, you cannot claim for all your bills of your business expenses. If you want to deduce such expenses, then you should find a reasonable way to divide your costs. For example, you can do your job only in one room in your home, which means that this specific room is considered your workplace. You can also control the time you spend on working. If you have 5 rooms in your home, and you electricity bill is £500, then we can assume that each room in your home uses the same amount of electricity which costs £100. However, it also depends on how many hours you work. If you work at your home only 3 or 4 hours a week then, you cannot apply for £100.
The other items that you can claim for allowable expenses are as following: printing, printer ink and cartridges, computer software, postage. However, very important is that stationery can be allowable taxes if you use them less than 2 years. In addition, your allowable expenses can be also property insurance, security, rent for business premises, business and water rates, and utility bills. If you need to travel a lot for business purposes, you can also deduce expenses such train, bus, air and taxi fares, hotel rooms, meals on overnight business trips. In case you travel by car allowance expenses can be fuel, repairs and servicing, vehicle insurance, vehicle license fees. However, keep in mind, that anything you want to claim for allowable business expenses must be proven by checks, tickets and invoices. This is very important to prevent business owners who want to save get money spent on their private travels. This practice is illegal and unfair against those business owners who pay their taxes. If you are looking for more self-employers information visit this website.