Tax Return Help! What Tax Deductions Am I Entitled To?

So you're officially registered and trading — past the childbirth pains of establishing a new business. And, as you prepare to file your mandatory Self-Assessment forms, you're wondering, "What can I claim on tax?" This post offers a variety of factors to consider in order to lower your tax burden!

Explaining Self-Assessment

However, in order to reduce your tax burden, you must first grasp what Self-Assessment is and how to register for Self-Assessment by the deadline. Self-Assessment is short for "Self-Assessment tax refund," and most business owners (self-employed single traders, limited company directors, shareholders, and LLP partners) are required to send their returns to HMRC each year stating how much they have made and where that money came from.

The amount of taxable income may be higher or lower than previously reported, depending on the amount of profit your company made the previous year. You can offset part of your Self-Assessment tax bills by declaring a lot of business expenses on your Income Tax Return for this very erratic economic rationale.

As a result, we've developed a list of expenses that may help you save money and answer the age-old question, "What can I claim on tax?"

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Expenses for Travel

"Can I deduct miles from my taxes?" It's a good idea to use your Self-Assessment return to get reimbursed for business-related travel expenses.

If you drive a car or a van for work purposes (for example, as a mobile firm or a field salesperson), you can deduct 45p from your tax bill for every mile you travel up to 10,000 miles. However, you can only claim 25p per mile over 10,000 miles.

So, if you drove 11,000 business miles last year, you can claim £4,500 (for the first 10,000 miles) and £250 for the subsequent 1,000 miles, for a total of £4,750. Motorcycle expenditures, on the other hand, must be claimed at a lower rate of 24p per mile.

In addition, you can deduct the following travel expenses:

  • Expense breakdown
  • Stays in hotels
  • Vehicle protection insurance
  • Fees for parking
  • Fees for licences
  • Tariffs for public transportation (train, bus, taxi, air fares)
  • Expenses for fuel
  • Fees for vehicle maintenance and service

Food costs during overnight business trips

You cannot claim for non-business-related driving or travel expenses, nor can you claim for any fines you obtain when travelling between your home and your regular place of employment.

Office Supplies

"Can I deduct the cost of office supplies from my taxable income?" A quick inspection of your remote work station will reveal several claimable goods, including:

  • Stationary for business
  • Printing costs (including ink and cartridges)
  • Your company's computer software (for less than two years)
  • Your company's computer software requires licenced renewal.
  • Phone charges (desk and mobile)
  • The fax machine
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Postage costs

You can file a claim for your laptop and/or PC as long as they are exclusively utilised for business. If you bought a personal computer in the previous tax year and only use it for business-related activity 50% of the time, you can only claim that expense on a pro-rata basis.

Capital allowances may be required for larger and more expensive things such as computers and machines.

"What may I claim on my taxes for expert help?" If you engage a professional, such as an accountant, architect, solicitor, or surveyor, you can deduct the cost of their services because you paid for their contribution to your firm.

You can also claim costs for professional indemnity insurance premiums and a variety of bank and insurance fees, such as:

  • Bank charges
  • Charges for overdrafts and credit cards
  • Rates of interest on business and bank loans
  • Hire Purchase Obligation

Lease payments Any alternative, qualified non-traditional finance payments

If your company uses cash accounting, you can only claim up to £500 in interest and bank charges on your Self-Assessment form.

Legal fees associated to the purchase of property or machinery are not allowable unless you use traditional accounting, in which case they can be claimed as capital allowances.

You cannot claim any legal or financial charges incurred as a result of breaching the law, just as you cannot claim travel expenditures.

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