So, for example, if you use one room in your six-roomed house for business, you can claim a sixth of your electricity and gas bills (or a flat rate amount under simplified expenses).īusiness premises and equipment repairs and maintenance (10) are also allowable expenses for sole traders, as are repairs on a room you use at home for business (11) or a share of a larger repair (eg to a roof). If you use your home for business, you can claim a proportion of your utility bills for business use. But what else can and cannot be claimed as an allowable expense when you’re a sole trader? Rent, mortgage, rates, utilities and insuranceĪllowable expenses can include property rent (1), mortgage interest (2) and council tax (3), business rates (4), water rates (5), electricity (6), gas (7), insurance (8) and security costs (9). The cost of buying goods for sale or use to deliver a service are allowable expenses, as are payments to sub-contractors, agency fees, wages, salaries and other staff costs (eg bonuses, pensions, benefits, employers’ NICs, training, etc). If a bill covers business and personal use, you must use a reliable method to work out what proportion was for business use before claiming allowable expenses (although you can claim a flat rate). To qualify as an allowable expense, something must be bought “wholly and exclusively” for business. ![]() ![]() ![]() Thankfully, many can be deducted as allowable expenses from your taxable profits to lessen your Income Tax bill. Business expenses are inevitable when you’re a sole trader.
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