If you’re self-employed, there are a number of things you can do to save money for your small business, which is why this week Axis Telecoms asks; what business expenses can you claim if you’re self-employed?
You Are Legally Entitled to Deduct Allowable Expenses from Your Taxable Profit
Because Axis Telecoms is a cost effective telecoms and energy provider to UK-based small businesses, we understand how important it is for SMEs to stay in control of their bottom line.
For you to do so, you need to find ways to save money, which is why you need to know about allowable expenses; expenses you are legally entitled to deduct from your taxable profit if you are self-employed. Therefore, if you have a turnover of £40,000, and you have £10,000 in allowable expenses, if you claim it, you will only pay tax on £30,000 worth of your turnover.
Claim Allowable Expenses in the Following Areas
In its bid to help small businesses, the government has allowed SMEs to register allowable expenses in a number of areas. These include, but aren’t limited to…
· Materials You Buy to Sell On: These are materials that you buy, but don’t sell as is, along with associated costs. This category includes goods for resale (stock), direct costs from producing goods and raw materials.
· Travel: Most small businesses need to travel for business purposes at some point, and when you do, there are certain costs you can claim as allowable expenses. These include parking, fuel, flight costs, train costs etc.
· Clothing: Certain businesses, for whatever reason, incur clothing expenses. If your company falls into this area, you can claim allowable expenses for things such as protective clothing needed for work purposes, uniforms and costumes (for actors and entertainers).
· Staff: To encourage small businesses to expand, the government allows those who are self-employed to register allowable expenses for staff costs. You can claim such expenses for staff wages, subcontractors, pensions, benefits, bonuses etc.
· Business Property: Running a business property, even if it’s your home, can be expensive, which is why the government allows the self-employed to file a number of allowable expenses specifically for your business . These include, but aren’t limited to business property rent, property insurance, utility bills, security etc.
Find Out More About Allowable Expenses
In other words, if you are self-employed and run a small business, there are a lot of allowable expenses you can claim to pay less tax, and bump up your firm’s bottom line. Find out more about what allowable expenses you can claim, to ensure you reap the benefits of being self-employed.