Claiming expenses as a freelancer
As a freelancer, claiming for expenses can be essential to helping you save money. Tracking all of your purchases and outgoing costs should, therefore, be done, so that you can deduct this from your profit and ensure that you are not overpaying on your tax. All invoices and receipts should be safely stored.
There are some restrictions on what you can claim – so don’t get too excited on this saving. Only costs related solely to the business and it's running’s count can be claimed. Here, Rebecca Dunne from Company Rescue explains which expenses you can claim as a freelancer.
Business travel costs
This regards the costs of travelling for business purposes, e.g. a flight from London to Paris for a board meeting or a journey from Newcastle to Liverpool for a business exhibition. Flight tickets, train fare, car mileage, taxi fare and toll charge for these types of journeys are all included.
Additionally, if your business travel includes an overnight stay, this is claimable.
If you order equipment, furniture or resources which is needed for the office. For example, desks, paper, computers, you are able to claim for these. The costs of items such as milk, tea bags and coffee can even be claimed for if they are used for business purposes, this being the office tea break entitlements.
Similarly, any repairs to office equipment or furniture etc. can be claimable deductions. For example, any repair to a laptop, if your work position is laptop-dependent.
If you work as a freelancer from home, you can claim household bills – though this is subject to business use only. For example, you work five days out of seven, you can only claim costs for those five days of business use. However, this covers all of your utility bills including electricity, heating, water, council tax, broadband and rent that you've used for business, so it is a claim you want to make sure you request if you are eligible for it.
Phone bills may also be ‘put through the business’ – again, dependent on the use of the phone.
If you have a work uniform, this can be claimed. The company logo must be visible on the piece of clothing. Additionally, protective clothing such as steel toe boots or protective eyewear can be claimed, if requested to be used for the job.
Freelancers can claim the cost of becoming a member of sites if it is for business purposes. For example, a writer joining a writer’s club. Likewise, membership to a course or related business group, for example, CIPD or People Management Magazine, for the HR profession. Any memberships for recreational purposes, for example, gym, are not claimable. You might also be able to claim the expense of joining the Freelance Directory, which could be used to market your freelance business.
How do I claim?
Simple, file your expense sheet with your tax return and self-assessment at the end of each tax year. It’s important to understand that the only expenses you can claim are those that are for your business use only. So, start checking, saving and retaining those receipts and make the most of your claims as a freelancer.
More on running your business and additional expenses you can put through your company.