Have you already started thinking about your year-end taxes? Usually, the submission date for a self-assessment tax return is January 31st, but this year it’s been extended to 28th February due to Covid. You need to be dealing with your tax return now! You might think that you don’t have to sit and plan to take advantage of all tax deductions. But we bet there are some expenses you wouldn’t even begin to imagine could be deducted. Take a look at the list we have compiled of tax-deductible expenses, it includes several items that you might not have taken into account.
1. Tax relief if you work from home
All of us have been working more from a lot more. You may be able to claim tax relief on some of the expenses incurred as a result of working at home regularly. For example heating, lighting and/or telephone costs. This only goes for things to do with your work, and not for those that might relate to both personal and work use, like rent or broadband access.
2. Work clothing & tools
Did you purchase work-related clothing and/or tools? You may be able to claim tax relief on the cost of these expenses. For example, repairing or replacing small tools you need to do your job (scissors or an electric drill). Uniforms, protective boots and other specialist clothing are also tax-deductible.
3. Travel & overnight expenses
Are you on the road a lot for work? You may be able to claim tax relief on the cost or money you’ve spent on food or overnight expenses. Did you spend money on the following?
- Public transport costs;
- Hotel accommodation if you have to stay overnight;
- Food and drink;
- Congestion charges and tolls;
- Parking fees;
- Business phone calls and printing costs.
4. Charitable contributions/donations
Donating as a business owner to a registered charity counts as an allowable expense, and the value of the donations can be deducted from business profits before paying tax, reducing your corporation tax bill. To claim tax relief, you must keep a record of donations showing the date, amount and which charities you’ve donated to.
5. Marketing costs
The cost of marketing for your business is another expense that you might forget to claim as a business owner. Take for example the following 2 advertising expenses that are usually deductible:
- Reasonable advertising expenses that are directly related to the business activities.
- An expense for the cost of institutional or goodwill advertising to keep the business name before the public if it relates to a reasonable expectation to gain business in the future. For example, the cost of advertising that encourages people to contribute to the Red Cross or to participate in similar causes is usually deductible.
Business-related professional subscriptions are also tax-deductible. Are you subscribed to trade magazines or professional journals? Do you make expenses for professional memberships needed to do your job? Most of these fees are deductible for you as a business owner. As a business owner, consider offering and covering subscriptions for other team members. This is not only a great tax benefit but also a great recruitment benefit!
Tax rates & allowances
Do you want to get more insight into tax rates and allowances? Head over to the Tax rates & allowances overview page of Hallidays. Information about tax rates, thresholds and allowances not only prepares you to better manage your finances but also helps in working out the correct amount of tax liability for the current year.
Keep this in mind…
… as long as something is beneficial for your business, you can deduct it from your business expenses. Even costs that might seem unusual to deduct at first sight!
Get in contact with an expert
Would you like to get more insight into your tax-deductible expenses? Get in touch with Xeinadin Group. We can help you manage your taxes, so you can focus on running your business. For a discussion about how we can help with your particular activities, please contact us!