What business expenses are tax deductible as a sole trader?

What business expenses are tax deductible as a sole trader?

If there is one area around accountancy as a sole trader that can seem complicated, it is which expenses are tax deductible. Most sole traders will find this area tricky to navigate when completing their tax return for the year. In a very simplified form, you are allowed to claim expenses for anything wholly and exclusively used for carrying out your trade, such as stock purchasing and payroll.

These tips will give you some helpful information on other factors to consider:

1. Costs of working from home

If you work out of your own property as a sole trader, then you are allowed to charge against a certain proportion of your bills, such as your utility bills. This accountancy tip can obviously add up over the year and bring some great savings.

2. Telephone and broadband

In the same way you can include your utility bills, the cost of using your telephone and broadband for business can be classed as a tax-deductible expense. In the case of the telephone, you would need to keep a track of which calls are for business use and then work out what proportion of your line rental and call charges you can claim back. Broadband works in the same way in that you would need to keep a log to show the business use against personal use in support of what you are claiming on your tax return.

3. Mileage

Another business expense you can claim against is mileage. Although most people think of this for car use, you can also claim it for motorcycle and bicycle use. Obviously, the mileage you are claiming for must be for business use and commuting to your place of work (there and back) cannot be included.

Although this is not an exhaustive list of what expenses are classed as tax deductible, it gives an idea of the most common ones. It really is best to get expert help with any tax or accountancy issues in this area though to be sure.

If you need a professional and experienced accountant to assist in this, then give us a call today and let us see how we can help you.

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