It would be lovely to expense school fees and your brand new Fender Strat – but a good rule of thumb when claiming for any expenses is that you can only claim for expenses which are ‘wholly and exclusively’ incurred in the performance of your duties (so unless you’re Jeff Beck, let the guitar lie).
However there are some differences:
You can claim full tax relief on accommodation costs, such as an overnight hotel when travelling for business-related purposes.
You can claim any associated accountancy fees incurred for doing your tax return.
You’re able to claim for monthly fees or charges incurred, which is good news if your cash flow is in crisis.
If you use your personal vehicle for business travel to a temporary work location, you’re able to claim a mileage allowance (using HMRC’s business mileage rates) – but make sure you keep a mileage log to support this claim. You’re allowed to claim the full running costs of your vehicle (such as insurance, repairs and servicing) or you can just choose to claim the mileage rates for journeys you make.
Equipment and office furnishings
You can claim for your laptop, personal computer and office furniture, if these are necessary to carry out your business. Similarly, you can claim for any specialist software that you need to do your work.
You can claim for the cost of insurance for your business, such as contents insurance for an office, professional indemnity insurance, or business equipment insurance.
Landline and broadband costs
If you’re using a home phone line/broadband for both business and personal calls, you can’t claim for line rental because they have a dual purpose. However, you may claim expenses for the business phone calls used on that line, provided they can be identified on the phone bill. Alternatively, and arguably less stressful, you could set up a separate phone line in your business name which is used 100% for business.
Legal and professional fees
Any legal or professional fees incurred while doing your job are claimable, as are professional subscriptions. So if you’re an actor, your Spotlight membership subscription is a taxable allowance, and if you’re a radiologist then so is membership to the Royal College of Radiologists.
Those Facebook ads can be pricey, but the good news is you can claim tax relief on them – as well as other advertising, such as press releases and TV and radio ads.
You can claim a reasonable portion of your mobile phone bill for business use (so if 30% of your bill is business-related, then you can claim that).
If you work out of an office, you can claim expenses for:
- Rent for business premises
- Business and water rates
- Utility bills
- Property insurance
- Repairs and maintenance
Those Manolos don’t count unless you’d lose your clients without them. But if you’re an actor, for example, you can claim on clothing used specifically for a role, or if you’re a dancer, your dance shoes are tax deductible – as long as you don’t wear them to go shopping in.
If you use other freelancers, agencies or other suppliers to help you deliver your products or services, then you can claim these costs in full.
Subsistence (food and drink)
You can claim extra allowable costs for food and drink if you need to travel for your work – for example, paying for breakfast on your way to a meeting or job, or dining out if you’re staying overnight somewhere. That doesn’t mean you have to go to the most expensive hot spot you can find though.
If you’re doing some training that relates to your registered trade, then you can claim it. You can also claim the cost of upgrading existing skills that will support your future business income.
Travel is one of the trickier expenses to know whether or not you can claim. The general rule is that, if you're travelling for business to somewhere that isn't your usual place of work, and isn't a regular occurrence, you can claim the expense.
If you work from home, then generally you can claim any travel you do for work.
If the travel you do to clients is regular, ie same time same place each week, then that wouldn't be allowable. But if your visits aren't predictable, then you can claim.
If your work demands that you travel to a different location for each job, such as a plumber or mobile hairdresser, then you are what HMRC calls an 'itinerate worker'. You can claim all your business travel.
Working from home
If you do all or most of your work from home, you can claim a flat-rate fee as an allowable expense or apportion actual costs using our Coconut Work from Home Allowance calculator.