Starting a new business can be expensive, but you can claim a lot of your start-up costs as expenses. For a car, this is 45p per mile for the first 10,000 miles per year and 25p per mile after. HMRC has a fixed rate for mileage that you can claim. In this case, you can claim relief based on the number of miles you travel. If you’re a contracted builder or painter, you’ll likely have a company vehicle you use to travel between sites. If you use public transport, simply keep the receipts to claim your fare. You can also claim for the costs you incur from travelling to client sites. You might be able to use HMRC’s simplified expenses system to calculate how much you can claim. Note that you can only claim for the portion of the utilities that you use for business purposes. If you have to spend a significant amount of time working from home, you could also claim for expenses like your landline, broadband fees, heating and lighting. You can do this by visiting HMRC’s approved list. However, make sure you check if HMRC recognises the professional body you subscribe to. Professional subscriptionsĭo you subscribe to a professional organisation or business publication to help you improve your trade? In that case, you may be able to claim the cost against your tax bill. HMRC will also consider the fact that you have to pay for these services when assessing your status under IR35, meaning they could prove your business as an independent entity. You can also claim relief for some insurance services. Examples of deductible services include hiring an accountant, solicitor, tax consultant or marketing professional. You can also claim tax relief on any services you need to run your business more efficiently. Examples include stationery, furniture, IT equipment, your company van, printing supplies and more.īasically, you can claim tax relief for any goods you have bought to carry out your daily business activities. Goods are physical items that you need to run your business successfully. To make it clearer, we’ve listed the main expenses contractors can claim: Goods In other words, you can’t claim expenses that also relate to personal use. While you can claim most of your expenses against your tax bill, it’s important to note that you can only claim for costs that relate to your business. Expenses like marketing costs and professional fees are strong indicators that you operate as a separate entity from your clients, which supports your IR35 status. Learn more about how IR35 affects contractors in this guide. In turn, you increase your company’s value and maximise the profits available for investment or drawing dividends (profits you pay your shareholders).Īdditionally, claiming your business expenses is an important part of demonstrating your company’s independence if you work outside IR35. You’ll come away with a lower tax bill (meaning you owe less in tax) and more spendable cash for your business. While this may seem counterproductive, deducting business expenses can improve the financial health of your company. Most expenses you have as a contractor will be tax-deductible, meaning you can deduct them from your business’ profits. Why should you claim expenses as a contractor? You can learn everything you need to know about business expenses in our ultimate business expenses guide. This could include travel expenses, phone and internet bills, and in some cases, even a proportion of your utility bills if you work from home.
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