The guardian recently published an article about doing self-assessed tax returns, which includes a section for us self-employed lovelies. I'm reposting it here because it seems every time I look into it I learn a bit more and a bit more about what I can claim on my tax return...
If you are a freelance/self-employed
• Gas, electricity, water, council tax. If you use your home to conduct your work you can claim a proportion of all your household bills, gas, electricity, water and council tax against your bill. If your office accounts for, say, 20% of your household space, you can claim 20% of the costs against tax.
• Mortgage. The interest portion of your mortgage repayments can also be claimed, again on a pro-rata basis.
• Broadband/phone. The same goes for broadband/phone costs. You can claim for any business calls. For line rental and broadband connection, a proportion of the cost can be claimed based on business use.
• Computers. If your computer is only used by the business, you can offset the whole cost. But if the family uses it half the time ... you get the idea.
• The £104 no-quibble deduction. Warburton says if you use your home in a minimal way to conduct your extra business, such as writing up your business records, HMRC will accept a £2 per week office deduction.
• Clothing. You can't claim unless you need specialist items that are entirely used for work. A self-employed journalist, for example, cannot claim for a new suit arguing he has to wear it as part of his work. But if, say, you are a self-employed tree surgeon, you can offset the full cost of steel toe-capped boots and a protective jacket.
• Entertaining. Taking clients out for lunch is a "non allowable expense", even if you spend the whole time talking about work.
I guess one thing I didn't know was about the office deduction. As I work from home, but all utilities/internet/council tax are included in the rent, its hard to know how much to claim. But a £2 per week deduction sounds mighty fair for using my kitchen table as my 9-5 work spot! Once I live in a larger space with a dedicated office it will be a lot clearer. Until then, my equipment is stored under a chair in the living room...
This year will be my 2nd time filing a self-assessment, and I'm hoping I've kept much better records than the year before. I didn't keep each and every receipt I could have, and so didn't claim as much as I could against my business expenses. But this year I've been much more meticulous! I have a giant file folder full of unsorted receipts that will take me weeks to get through, but I'll do it...
