List of Expenses a Small Business or Sole Trader Can Claim

Below is a list of expenses you can claim, this will reduce your tax liability.

We have checked the items here against several lists published online by chartered accountants.

We suggest you include all of these in your accounts before asking a chartered accountant or tax adviser to double check your books before submission to HMRC.

This page is targeted to small roofing businesses that are sole traders but any type of business will find this guide informative.

The rules for limited companies will differ.

 

Allowable Expenses and Capital Expenses

  1. advertising costs including flyers, business cards, boards, web directories etc
  2. bank charges and interest on business overdraft
  3. books, magazines and publications, including local newspapers if you advertise in them and wish to check your advert
  4. bulbs, fuses, cables, jump leads and plugs
  5. cleaning equipment
  6. clothing – safety clothing and safety boots and also work specific clothing that cannot be worn for private use (ie has logo on the clothing)
  7. clothing – cleaning, dry cleaning, laundering costs for workwear
  8. courier and postage fees including stamps and postage insurance
  9. computer software, including downloads, CDs, cloud services and online software licences
  10. computer hardware including laptops, PCs, printers, memory cards/sticks, cables and chargers
  11. entertainment – staff parties and staff entertainment up to £150 per person, per year
  12. hire and leasing costs
  13. hotel accommodation if you work away
  14. insurance policies on vehicles, tools and liability
  15. interest on business loans
  16. legal costs
  17. motoring expenses including fuel, repairs, MOT, breakdown subscription, parking charges, road license
  18. materials and stock
  19. office furniture including chairs, desks and filing cabinets
  20. phones – landline, internet and mobile, print call list to separate business calls from personal calls, then calculate what percentage of your fixed charges can be claimed as a business expense. i.e if 50% of your calls are for business use, then also claim 50% of any mobile monthly charges.
  21. pension contributions for yourself and any employees
  22. printing and photocopying
  23. rent and rates – for your home, calculate the floor area used solely for the business, i.e for an office and stock storage area, for example if it’s 5% solely for business use then claim 5% of rent, heating and lighting bills and council tax.
  24. stationary including paper, envelopes, pens, pencils, marker pens, paper clips, folders, inkjet cartridges
  25. tools and equipment – if you plan to keep for more than two years, claim as a capital expense
  26. website creation and maintenance including hosting fees
  27. warranties on computers, vehicles, tools and equipment
  28. waste carriers license fee
  29. wages and salaries of staff

Business Expense Vs Capital Expenses

Your purchases will need to be separated into two categories.

Business expenses are purchases that are consumed or sold within a year or two. Examples; materials for resale, fuel, training, accountant’s fees, monthly subscriptions and stationary.

Capital expenses are purchases that you intend to keep for more than a year or two and will have a resale value. Examples; laptop, pc, printer, photocopier, scaffold, ladders, vans, camera, office furniture.

Show Calculations For Mixed Business/Personal Expenses

If you use phones, the internet, premises and other items for both personal and business use, it’s important that you separate the business element by showing a calculation.

If 5% of your home is used solely as an office then claiming 5% of rent, council tax and utility bills might be allowable.

If 5% of your home is used as an office during the day but in the evening has mixed use, or is solely used for personal reasons then you could consider claiming half of 5% (2.5%) as a business expense.

HMRC are generally (but not always) quite forgiving provided that:

  • your claim is not unreasonable
  • you have provided a calculation
  • the calculation is based on floor space and how much time it’s used solely for business use

Similar calculations should be made for mobile and landline bills.

For vehicles that are used solely for business use, such as a van, keep all receipts for fuel, MOT, servicing and repairs.

If you also use your personal car for occasional business use, keep a record of the mileage that is used solely for business use and calculate an expense based on the Mileage Rate.

Example

300 miles in your personal car for business use only. Disregard all fuel receipts, MOTs and other costs and multiply the 300 by the Mileage Rate (currently 0.45p)

300 x 0.45p = £135 is the business expense you can claim. Don’t claim fuel, MOT or other costs such as repairs.

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