What can freelancers legitimately claim expenses for in their tax return?

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Updated: 25th February 2021

Understanding expenses for freelancers and the self-employed

As a freelancer you can claim certain expenses against your tax bill, which has the effect of reducing it, but the amounts you claim must be for business use only. You’re not allowed to claim for money withdrawn from the business that’s used to pay for personal use items.

Being a freelancer, it’s likely that you work from home to some degree, and you can claim some of your household costs against tax as long as you isolate the proportion that’s used for your business.

You can also claim a wide range of other costs for your freelance business, but first let’s look at allowable expenses you can claim for working from home, and how they might be calculated.

Calculating work from home expenses as a freelancer

HMRC state that a ‘fair and reasonable basis’ should be used to apportion business costs if you work from home. One commonly used method is to count the number of ‘qualifying’ rooms – this typically excludes bathrooms, hallway, landings, and sometimes kitchens - and then use a percentage for each room’s use in your business.

You can claim:

  • The business element of your gas and electricity for the rooms involved
  • A proportion of council tax and metered water rates
  • Your mortgage interest but not the capital
  • The business element of your phone calls
  • Apportioned domestic insurance
  • Business insurances in full
  • Apportioned cleaning costs
  • Repairs to your property in some instances

Some freelancers choose to use the ‘simplified expenses’ scheme to calculate some of these costs, and we’ll look at how that works a little later.

Other legitimate freelancer expenses

Other claimable costs include office stationery, postage and packaging for business use, printer cartridges and printer paper. You can also claim various vehicle and travel-related costs, including insurance, fuel, parking, repairs, servicing, and car hire charges.

As far as travel is concerned, the journey(s) must be work-related and will be either in the form of a mileage claim or the costs of travelling on public transport. Work wear for your business may be claimed if it has the business logo, as may safety/protective clothing should you need them for work.

If you claim the actual costs of travel you’ll need to keep very detailed records of all your journeys so you can produce supporting evidence for the claim to HMRC if necessary. The alternative is to use the fixed rate mileage scheme, although you’ll still need to keep proper records for this.

Training courses wholly related to your line of work as a freelancer are also allowable, as are professional subscriptions and memberships.

What are simplified expenses for freelancers and the self-employed?

Some self-employed people use the simplified expenses scheme, which makes calculating costs easier and less time-consuming. You can use this method for expenses such as gas and electricity when working from home, or vehicle expenses – essentially, it’s a flat rate scheme based on the number of hours you work there.

The main aspect to remember when claiming expenses against tax is that the cost must be wholly and exclusively for business purposes. If you would like more information on claiming freelancer expenses in your tax return, call our team of experts at Real Business Rescue.

We’ll make sure you’re claiming all the expenses you’re entitled to, and legitimately reduce your tax bill. Real Business Rescue offers free same-day consultations and operates an extensive network of offices around the country, so you and your business are never far from professional help.

Jonathan Munnery


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