Since I started blogging I’ve had the privilege to meet many other fabulous bloggers who are all carving wonderful careers for themselves as their businesses develop. It isn’t an easy journey as there are many things to consider when becoming self-employed, and one of the most important to get absolutely right is tax!
For freelancers in the United Kingdom, the taxation rules are based on two separate categories: capital expenditures and allowable expenses. The first category includes items that are necessary to your work; the second category includes expenses are relevant to maintenance and upkeep of those necessary items. I thought that in todays’s blog post I would usefully list all the accepted expenses in both categories:
- Office space and/or purchase of property (shop, studio etc…)
- Equipment – office fixtures and fittings, including computers and cameras.
- Travel costs – AA/RAC membership, train, bus, air and taxi fares. Running costs of a car or other vehicle, including petrol, car tax, insurance, repairs and servicing – this is based on the proportion of mileage that was used solely for your business.
- Bank fees – bank, overdraft and credit card charges, hire purchase interest and leasing payments.
- Insurance – professional indemnity and public liability insurance premiums.
- Office utilities and supplies – phone, mobile, internet, email and fax running costs; postage, stationery, printing and small office equipment costs; computer software.
- Advertising and Marketing – newspapers, directories, website costs.
- Accountancy – accountants and solicitors fees.
- Subsistence – only a reasonable amount for breakfast and evening meals on overnight trips.
Top Tax Tips for Freelance Bloggers
1. Keep your accounts up to date, as backlogs can make things increasingly confusing, invoices can get lost and things overlooked. Keep everything relating to your accounts in one place, and always ensure that your digital records (spreadsheets etc…) are backed up.
2. Neatness will always be your best friend when it comes to filing your tax return as auditors can read through and approve your return quickly. You can file your return online too, which is a fast and efficient way to do this.
3. Don’t let the forms confuse you! Just because there are pages of endless empty boxes on the tax form don’t feel you have to come up with a number for each one! Focus on the information that you DO have, and find the boxes which correspond. Remember that there are two significant parts to your tax return: your income, and your deductions.
4. Use a professional if you’re really unsure! In fact, hiring an accountant for your self-employment tax return is a deductible expense! Make absolutely certain to take along all relevant receipts and invoices for your meeting.
5. Don’t throw your old tax returns away. HM Revenue and Customs says to keep them for 6 years.
6. Be punctual! There’s no benefit to waiting until the last minute to file your tax return, you could incur penalties.Depending on where you file, there are often staggered deadlines for your tax return based on whether it is filed online or on paper, or whether or not it is a self-employed form. If you file online in the UK, the deadline is January 31. If you send a paper form, the deadline is October 31.
For further information, please look at this super useful guidance sheet from HM Revenue and Customs.
I hope this helps!