If you’re self-employed, you can claim expenses against your tax bill, but not all business expenses qualify so it’s important to make sure your claim is valid. Unless something you buy for your business is a capital asset, for example, a computer or machinery (which you claim for under different rules), you can deduct its full cost when working out your taxable profits. You receive immediate tax relief for the full amount.
Self-employed car costs
If you’re self-employed, you can claim the running costs of a car, but not the cost of buying one. If you use the same car privately, you can claim a proportion of the total costs.
Cash flow boost for self-employed
If you are setting up as self-employed, you may be able to improve your cash flow by choosing an accounting year that ends early in the tax year. This maximises the delay between earning your profits and your final tax demand.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.
THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.
TAXATION & TRUST ADVICE IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.