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Sole Trader Expense Guide

A Sole Trader’s Guide to Allowable Expenses

As a sole trader in Chester, claiming every allowable business expense is the key to ensuring you don’t pay more tax than you need to. However, knowing what you can and can’t claim under HMRC rules can be confusing.

This guide, from our 5-star rated, ACCA-certified accountants, breaks down the most common allowable expenses to help you prepare for your Self-Assessment with confidence.

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A Breakdown of Common Allowable Expenses

Here is a guide to some of the most common deductions you can claim on your tax return. Remember to keep a clear record and receipt for every business expense

Office & Premises Costs

  • Office Supplies: Stationery, printer ink, postage, and business software subscriptions.
  • Business Premises: Rent, business rates, utilities, and property insurance for your commercial premises.
  • Working From Home: You can claim either a simplified flat rate from HMRC or a proportion of your household utility, internet, and council tax bills based on business use.

Travel & Vehicle Costs

  • Vehicle Expenses: You can claim either a simplified mileage allowance (45p per mile for the first 10,000 miles) or the actual costs of running your vehicle, such as fuel, insurance, repairs, and breakdown cover.
  • Other Travel: Business-related train, bus, air, and taxi fares.
  • Accommodation: Hotel costs and meals for overnight business trips are also allowable.

Marketing & Professional Costs

  • Marketing & Advertising: Costs for advertising your business, including online ads, print marketing, and website maintenance.
  • Professional Fees: Fees paid to accountants and solicitors for business matters.
  • Insurance: Premiums for business insurance, such as public liability or professional indemnity insurance.
  • Subscriptions: Membership fees for professional bodies and subscriptions to relevant trade journals.

Stock, Staff & Other Costs

  • Stock & Materials: The cost of goods you buy to sell on, and any raw materials you use to produce goods.
  • Staff Costs: Salaries paid to employees, plus employer’s National Insurance contributions and staff training costs.
  • Clothing: The cost of a specific uniform or essential protective clothing required for your work. Everyday clothing is not an allowable expense.
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Top Tips for a Stress-Free Self-Assessment

Filing your tax return doesn’t have to be a headache. A little planning goes a long way.

  • Start Early: Don’t wait until the January deadline. Gathering your paperwork throughout the year reduces stress and ensures you don’t miss any allowable expenses.
  • Keep Good Records: This is the golden rule. Keep all your business invoices, receipts, and bank statements organised. Use digital folders or cloud software to make life easier.
  • Leverage Technology: Cloud accounting software like Xero or QuickBooks can simplify tracking income and expenses, reduce errors, and connect directly with us for seamless collaboration.
  • Be Aware of Scams: HMRC will never contact you unexpectedly via text or email to offer a tax refund. Be vigilant and verify any suspicious communications.

    Have Questions About Your Expenses?

    If you’re unsure whether an expense is allowable or need expert help preparing your Self-Assessment, our friendly Chester team is here to help.

    Call/WhatsApp: +44(1244) 220-062

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