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Calculate your tax billIn this article
If you're self-employed you'll be charged tax based on the amount of profit you've made in a tax year, but there are a number of expenses you can claim that will lower your tax bill.
HMRC allows you to deduct the costs of certain purchases that are necessary to run your business. These costs can be deducted from your profit and, by doing so, will reduce the amount of tax you'll owe.
In general, unless something you buy for your business is a capital asset - such as a computer or machinery (which you claim for under different rules) - you can deduct its full cost when working out your taxable profits.
You get immediate tax relief for the full amount.
Send your tax return to HMRC using the service provided by GoSimpleTax.
Calculate your tax billKnowing what you're allowed to claim can be complicated - especially as self-employed work can vary significantly from person to person.
See our lists below to work out your tax-allowable expenses.
You can claim:
You cannot claim:
You can claim a proportion of the costs for:
But you won't be able to write off all of your bills. The figures you submit should be based upon the floor area or the number of rooms used for business, and the proportion of time the space is used for working.
The graphic below explains how this works, with an example.
Bear in mind that if you start working from home, you might need to change your home insurance cover.
If you work for 25 hours or more a month from home, you may be able to use HMRC's simplified expenses system.
You can claim:
If you use the car privately, you can only claim a proportion of the costs equal to how much the car is used for business purposes. This is usually the ratio of your business mileage to your total mileage. It's worth keeping a log of business mileage for a representative period, as well as all bills.
You can't claim:
You can claim:
You can't claim:
HMRC distinguishes between people who work under a 'contract of service' - those employed by a company - and the self-employed, who work under a 'contract for services.'
It uses some standard questions to decide which you are. If you can answer 'Yes' to all or most of the following, you will usually be accepted as being self-employed:
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