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Tips to Help You Save On Tax When Self-Employed

Maintaining financial strength as a sole proprietor and freelancer can be quite a challenge for many. Saving up on your taxes and reducing taxable profit are some of the ways that can help you remain afloat in business today. Understanding how taxes work, and especially for the self-employed can help you save more money than you can imagine. Self-employed persons enjoy a number of tax deductibles and have a wider margin of taxation, all which when taken into account can save you lots of money in taxes.

If you are self-employed, there are several expenditures you can claim to help reduce your tax bill. These include advertising costs, travel expenses, work equipment, catering, or even a company car. You will however be required to produce accompanying documents for all the expenses in your tax returns for these to be considered. That said, it would be advisable to keep a record of all expenses and purchases you have made to be able to make a claim. Read more about VAT on VATGlobal.

Many of the expenses mentioned above may not be liable for self-employment tax deductions or freelance tax. This is because some goods take much longer to depreciate than others. You might be able to gain back at least 18% of the cost of equipment or machinery as freelance or sole trader returns under capital allowances.

How can a sole proprietor or a freelancer save on tax, you might ask. outlined below are some tips and tricks on how you can save some money when self-employed.

1. Business Premises Expenses

Do you run your business from a rented building, one that you own, or your own home? If you do, you can then use the options provided when filing for tax deductions commonly found under the Business premises expense. Should the HMRC choose to come for an audit, you should be able to prove that you use your living space as your workspace. A workspace can be defined as the space that one uses exclusively and regularly for the principal purpose of running the business. The deductions are calculated based on the amount of space the business occupies, as well as other expenses in the home including phone bills, rent, the value of the house, etc. It is worth noting that, you cannot claim expenses for buying a property or building to use as your office. You might, however, claim an allowance if using traditional accounting or operating on cash basis accounting.

2. Internet and Telephone Expenses

Just as your home office, you can claim deductibles on the business internet and phone expenses. Proving the portion or percentage of internet or phone usage for business purposes separate from family and leisure can however be a challenge when claiming such deductibles. This is to say; it will be impossible to claim deductibles on the entire phone and internet bill. The only way you would do that is if you have a specific phone for the business, and a separate internet connection accounts for the business. You will also need to provide proof of how much time you spend online handling business related stuff for the deductibles to be valid.

3. Clothing Expenses

You can include clothing expenses in tax deductibles as well. This is however only applicable if the said clothes are necessary for the kind of work you do. This can be required footwear, protective clothing, uniforms, aprons, hairnets, and costumes. As long as the clothes are directly attached to the business, you should then include them when filing your returns for tax relief.

 
 
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Tips to Help You Save On Tax When Self-Employed

Maintaining financial strength as a sole proprietor and freelancer can be quite a challenge for many. Saving up on your taxes and reducing taxable profit are some of the ways that can help you remain afloat in business today. Understanding how taxes work, and especially for the self-employed can help you save more money than you can imagine. Self-employed persons enjoy a number of tax deductibles and have a wider margin of taxation, all which when taken into account can save you lots of money in taxes.

If you are self-employed, there are several expenditures you can claim to help reduce your tax bill. These include advertising costs, travel expenses, work equipment, catering, or even a company car. You will however be required to produce accompanying documents for all the expenses in your tax returns for these to be considered. That said, it would be advisable to keep a record of all expenses and purchases you have made to be able to make a claim. Read more about VAT on VATGlobal.

Many of the expenses mentioned above may not be liable for self-employment tax deductions or freelance tax. This is because some goods take much longer to depreciate than others. You might be able to gain back at least 18% of the cost of equipment or machinery as freelance or sole trader returns under capital allowances.

How can a sole proprietor or a freelancer save on tax, you might ask. outlined below are some tips and tricks on how you can save some money when self-employed.

1. Business Premises Expenses

Do you run your business from a rented building, one that you own, or your own home? If you do, you can then use the options provided when filing for tax deductions commonly found under the Business premises expense. Should the HMRC choose to come for an audit, you should be able to prove that you use your living space as your workspace. A workspace can be defined as the space that one uses exclusively and regularly for the principal purpose of running the business. The deductions are calculated based on the amount of space the business occupies, as well as other expenses in the home including phone bills, rent, the value of the house, etc. It is worth noting that, you cannot claim expenses for buying a property or building to use as your office. You might, however, claim an allowance if using traditional accounting or operating on cash basis accounting.

2. Internet and Telephone Expenses

Just as your home office, you can claim deductibles on the business internet and phone expenses. Proving the portion or percentage of internet or phone usage for business purposes separate from family and leisure can however be a challenge when claiming such deductibles. This is to say; it will be impossible to claim deductibles on the entire phone and internet bill. The only way you would do that is if you have a specific phone for the business, and a separate internet connection accounts for the business. You will also need to provide proof of how much time you spend online handling business related stuff for the deductibles to be valid.

3. Clothing Expenses

You can include clothing expenses in tax deductibles as well. This is however only applicable if the said clothes are necessary for the kind of work you do. This can be required footwear, protective clothing, uniforms, aprons, hairnets, and costumes. As long as the clothes are directly attached to the business, you should then include them when filing your returns for tax relief.

 
 
Subscribe to our newsletter!
One a month, no spam, honest

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Coming up
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Tips to Help You Save On Tax When Self-Employed

Maintaining financial strength as a sole proprietor and freelancer can be quite a challenge for many. Saving up on your taxes and reducing taxable profit are some of the ways that can help you remain afloat in business today. Understanding how taxes work, and especially for the self-employed can help you save more money than you can imagine. Self-employed persons enjoy a number of tax deductibles and have a wider margin of taxation, all which when taken into account can save you lots of money in taxes.

If you are self-employed, there are several expenditures you can claim to help reduce your tax bill. These include advertising costs, travel expenses, work equipment, catering, or even a company car. You will however be required to produce accompanying documents for all the expenses in your tax returns for these to be considered. That said, it would be advisable to keep a record of all expenses and purchases you have made to be able to make a claim. Read more about VAT on VATGlobal.

Many of the expenses mentioned above may not be liable for self-employment tax deductions or freelance tax. This is because some goods take much longer to depreciate than others. You might be able to gain back at least 18% of the cost of equipment or machinery as freelance or sole trader returns under capital allowances.

How can a sole proprietor or a freelancer save on tax, you might ask. outlined below are some tips and tricks on how you can save some money when self-employed.

1. Business Premises Expenses

Do you run your business from a rented building, one that you own, or your own home? If you do, you can then use the options provided when filing for tax deductions commonly found under the Business premises expense. Should the HMRC choose to come for an audit, you should be able to prove that you use your living space as your workspace. A workspace can be defined as the space that one uses exclusively and regularly for the principal purpose of running the business. The deductions are calculated based on the amount of space the business occupies, as well as other expenses in the home including phone bills, rent, the value of the house, etc. It is worth noting that, you cannot claim expenses for buying a property or building to use as your office. You might, however, claim an allowance if using traditional accounting or operating on cash basis accounting.

2. Internet and Telephone Expenses

Just as your home office, you can claim deductibles on the business internet and phone expenses. Proving the portion or percentage of internet or phone usage for business purposes separate from family and leisure can however be a challenge when claiming such deductibles. This is to say; it will be impossible to claim deductibles on the entire phone and internet bill. The only way you would do that is if you have a specific phone for the business, and a separate internet connection accounts for the business. You will also need to provide proof of how much time you spend online handling business related stuff for the deductibles to be valid.

3. Clothing Expenses

You can include clothing expenses in tax deductibles as well. This is however only applicable if the said clothes are necessary for the kind of work you do. This can be required footwear, protective clothing, uniforms, aprons, hairnets, and costumes. As long as the clothes are directly attached to the business, you should then include them when filing your returns for tax relief.

 
 
Subscribe to our newsletter!
One a month, no spam, honest

Now on air
Coming up
More from Uncategorized
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Tips to Help You Save On Tax When Self-Employed

Maintaining financial strength as a sole proprietor and freelancer can be quite a challenge for many. Saving up on your taxes and reducing taxable profit are some of the ways that can help you remain afloat in business today. Understanding how taxes work, and especially for the self-employed can help you save more money than you can imagine. Self-employed persons enjoy a number of tax deductibles and have a wider margin of taxation, all which when taken into account can save you lots of money in taxes.

If you are self-employed, there are several expenditures you can claim to help reduce your tax bill. These include advertising costs, travel expenses, work equipment, catering, or even a company car. You will however be required to produce accompanying documents for all the expenses in your tax returns for these to be considered. That said, it would be advisable to keep a record of all expenses and purchases you have made to be able to make a claim. Read more about VAT on VATGlobal.

Many of the expenses mentioned above may not be liable for self-employment tax deductions or freelance tax. This is because some goods take much longer to depreciate than others. You might be able to gain back at least 18% of the cost of equipment or machinery as freelance or sole trader returns under capital allowances.

How can a sole proprietor or a freelancer save on tax, you might ask. outlined below are some tips and tricks on how you can save some money when self-employed.

1. Business Premises Expenses

Do you run your business from a rented building, one that you own, or your own home? If you do, you can then use the options provided when filing for tax deductions commonly found under the Business premises expense. Should the HMRC choose to come for an audit, you should be able to prove that you use your living space as your workspace. A workspace can be defined as the space that one uses exclusively and regularly for the principal purpose of running the business. The deductions are calculated based on the amount of space the business occupies, as well as other expenses in the home including phone bills, rent, the value of the house, etc. It is worth noting that, you cannot claim expenses for buying a property or building to use as your office. You might, however, claim an allowance if using traditional accounting or operating on cash basis accounting.

2. Internet and Telephone Expenses

Just as your home office, you can claim deductibles on the business internet and phone expenses. Proving the portion or percentage of internet or phone usage for business purposes separate from family and leisure can however be a challenge when claiming such deductibles. This is to say; it will be impossible to claim deductibles on the entire phone and internet bill. The only way you would do that is if you have a specific phone for the business, and a separate internet connection accounts for the business. You will also need to provide proof of how much time you spend online handling business related stuff for the deductibles to be valid.

3. Clothing Expenses

You can include clothing expenses in tax deductibles as well. This is however only applicable if the said clothes are necessary for the kind of work you do. This can be required footwear, protective clothing, uniforms, aprons, hairnets, and costumes. As long as the clothes are directly attached to the business, you should then include them when filing your returns for tax relief.

 
 
Subscribe to our newsletter!
One a month, no spam, honest

Now on air
Coming up
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