If you are self employed your business will have various expenses and running costs which you can deduct to work out your taxable profits. Allowable expenses does not include money taken from the business to pay for private purchases
Typical expenses include the following
- Office costs for example stationary and phone bills
- Travel costs which includes, fuel, bus and train fares
- Staff costs which includes salaries and sub contractor costs
- Stock purchases and raw materials which you buy to sell on
- Financial costs, loans to finance the business, insurance
- Premises costs for example rent, heat, electricity, rates
- Advertising and marketing costs, website costs
If you work from home you may be able to claim a proportion of the costs for things like heating, electric, rates, rent or mortgage interest, internet and phone use. You need to find a reasonable method to divide your costs for example by the number of rooms you use for business or the amount of time you spend working from home.
Foe example you have 4 rooms in your house one of which you use as an office. If your electricity bill is £600 for the year you can claim £150 as an allowable expense for your business electricity costs.
Simplified expenses
You can avoid complex calculations for working out business expenses by using simplified expenses. They are flat rates that can be used for vehicles, working from home and living on your business premises.
KPM Accounting 