Here's our quick guide to effortless expenses to make sure you're not missing out on key tax savings.
Every year, millions of self-employed people miss the opportunity to make key tax savings, resulting in more of their hard-earned cash falling into the pockets of HMRC.
The key to this is allowable expenses; knowing what you can claim and having a reliable and easy way to keep on top of it all so you don’t miss out.
Here’s our guide to effortless expenses.
Let’s start by taking a look at some common expenses, and what can and can’t be claimed:
To see an exhaustive list of all expenses and categories, head over to HMRC's website. The rules differ in some cases depending on whether you're a Sole Trader or a Limited Company. If in doubt, it's always best to speak with an accountant.
The benefits of claiming all of your allowable expenses is pretty clear, but you can’t claim everything. The rule of thumb is that you can only claim expenses which are ‘wholly and exclusively’ for business purposes.
If you can prove that your purchase was made solely for business use, you should be able to claim it as an expense.
Keeping track of what you bought, and when, is key – and Coconut makes this part really easy. Whenever you make a purchase, we automatically categorise it for tax and send you a notification reminding you to snap the receipt and upload it to the app so you don’t have to worry about it later.
With handy tools like notes and VAT management, all your bookkeeping is done within a few seconds of the purchase taking place. Goodbye shoebox of receipts!
You’ll also find useful tips on what you can and can’t claim to help you learn the rules and maximise your tax savings with confidence.
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As part of HMRC’s Making Tax Digital, sole traders will soon be required to complete 4 tax submissions per year instead of 1.
Take a look at the latest sole trader tax rates for the 2021/22 as well as our advice on how to prepare for the new tax year.