Do You Need to Submit A Self-Assessment Tax Return & What Expenses are Allowed?

January 21, 2021

The Self-Assessment Tax Deadline (31 January 2021) is fast approaching but our team remain fully operational as we work to submit all of our client’s returns in a timely manner. However, you may be unsure what expenses are allowable on your return or whether you need to submit a return at all. We have detailed the answer to both of these questions in this article.

Do I Need to Submit a Self-Assessment Tax Return?

If you are self-employed as a sole trader or the partner of a business partnership, then you will need to ensure that you submit a tax return by midnight on the 31st January 2021.

If you are finding it tricky to juggle other commitments with getting your head around an often confusing process, please click here to get in touch with our team and we can get the ball rolling on your return today.

What Expenses Are Allowable?

We will be assuming that your business is using cash basis accounting, where you declare your income or expenditure only when it goes in or out of your business. This method of accounting has slightly more liberal rules regarding allowable expenses. If you are unsure which method your business uses, we can help to determine this for you.

  • Business Premises: Heating, electricity, council tax and other bills are all eligible for a tax claim back.
  • Stationery and Phone Bills: Printer ink cartridges, postage stamps, phone bills and more are eligible for a claim. If you use your phone services both for personal and business uses, a realistic way of dividing these must be demonstrated. Software that your business uses for less than 2 years or software you pay a recurring subscription for can also be claimed back on.
  • Professional and Business Services: Advice from accountants, as well as business overdraft and credit fees, are all also eligible.
  • Staff and Employee Costs: Relief on salaries, bonuses, pensions, benefits staff and employee costs, agency fees, subcontractors and employer’s National Insurance contributions can all be claimed back on.
  • Travel Costs: There are a whole host of travel costs that you can claim on, including insurance, repairs and more.
  • Clothing: General clothing, including suits, cannot be claimed on. However, if you have had to purchase uniforms that identify the work you do then you can.
  • Stock and Materials: Tax can be claimed back on items that you resell, raw materials and direct costs from producing goods.
  • Marketing and Advertising: Costs incurred for the marketing and advertising of your business can be claimed back on. However, business lunches are not eligible and are classified as entertainment.

There are many other allow expenses that come under the above category headers, if you are finding it difficult to make sense of all the return guidance and get yours sent in before the deadline, please click here to get in touch with one of our experienced accountants who can advise on and action your Self-Assessment Tax Return.

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