As a self-employed consultant you are likely to have several running costs and expenses. Theses costs and expenses should be taken away from your business income to work out your profits. Not all expenses are allowable for tax purposes, it is therefore important to be aware of you what you are and aren’t allowed in order to save money against tax and avoid a HMRC enquiry.
What are allowable expenses?
Allowable expenses include costs that you pay with the sole purpose of earning business profits. You’re not able to deduct costs:
· For non-business or personal purposes
· For buying or improving fixed assets or capital items which last for several years
· Which are recoverable under an insurance policy
Below are some allowable expenses that you may be able to claim as a consultant:
Accountancy fees, like many other professional fees, are allowable expenses. This means that you can claim the cost of your tax returns against your taxable income.
As a consultant it is likely that you have to market yourself to gain work. The money you spend on ad campaigns and creation is claimable against tax. This includes the costs of running a website.
If you have brought a car for the purpose of work, traveling from one client to another, you can claim a portion of your car insurance against tax.