Small Business Expenses for Tax

Expense Basics for Tax

Expenses are important, as they reduce your tax bill.

The law around claiming expenses for the Self Employed is that the expense must be “wholly and exclusively” for business.

• Confusingly something that is both private and business can be apportioned to make it “wholly and exclusively”,
• Some expenses cannot be apportioned and are disallowed –  alas its on a case by case basis and the rules are quite fragmented.  There is no one definitive list of deducible and non deductible items in statute.

For Sole Traders under the rules for HMRC Trading Allowance you can claim the greater of £1,000 or the actual expenses you incur – which is useful if your expenses are not otherwise that high.

Expenses Checklist

Here is a non exhaustive list of possible expenses to claim:

• Materials, loose tools and consumables
• Staff wages, salaries and benefits
• Business premises costs – rent, rates, water, electric
• Equipment rental / hire
• Advertising
• IT and internet
• Phone
• Mobile phone
• Use of home for business – see separate guide
• Travel but there are special rules for regular journeys – see our separate guide
• Car costs (either claim a business proportion of all costs, or claim at 45 ppm for up to 10,000 miles a year, then 25ppm afterwards)
• Insurances
• Performing rights if you are using music in business premises
• Journals
• Reference books
• Professional memberships
• CPD – including related travel and accommodation
• Stationery
• Printing (eg business cards)
• Web design and hosting
• Protective clothing – but not everyday office / sales clothing

There is another expenses guide under the PSC section of our website, tailored to those working through Personal Service Companies
Expenses for a PSC

There is a checklist for Yoga Teachers on the website of our Daughter business YogaTax
What Expenses Can Be Claimed Against Tax?