When it is time to fill out an annual tax return, many freelancers feel unsure about what they can deduct as business expenses. Let’s look at six of the most commonly missed expenses that could see your tax bill reduced.
1. Clothing
You can’t deduct the cost of your day-to-day clothes, even if you wear them for work; however, you can claim for uniforms, personal protective wear, and costumes for entertainers or performers.
2. Office
There are many office costs you can deduct as expenses, including printer ink, paper, and even computer software. These expenses also allow for the business portion of your phone and internet bill.
3. Premises
Even if you work from home, you can deduct premises expenses such as rent and utilities; however you can only claim for 50% of the room you use. This is an area that many freelancers struggle to understand when they do their tax return, but Worcester accountants such as www.randall-payne.co.uk/services/accountancy/worcester-accountants can advise you on the matter.
4. Travel
Any travel you undertake for your freelance work is a deductible expense. This includes 45p per mile for petrol up to 10,000 miles and 25p per mile after and public transport fares. Other travel costs can be deducted if they were imperative to your business activity; for example, if you have a job in another city, you can deduct your hotel cost and meal.
5. Training
If you attend any training that is directly related to your role as a freelancer, you can deduct these expenses in your tax return. You can also claim for some training that is indirectly related to the role as long as it is relevant to the running of your business, such as computing or accountancy training.
6. Marketing
A freelancer can also deduct costs related to marketing themselves, such as adverts and website hosting.
From travel to marketing costs, there are many ways a freelancer can reduce their tax burden by deducting expenses. If you don’t feel confident filing your self-assessment tax return, seek advice from an accountant.
