Reducing your tax bill is without doubt one of life’s pleasures. Unfortunately it’s quite difficult as HMRC is not in the business of helping us to pay less. Nonetheless, with a little persistence it’s possible to whittle back what you owe. Here are six potential expenses you might be able to offset against your overall bill.
1. Working from home
This applies both to freelancers and those required to work from home by employers. You can claim for an increase in household expenses such as heating, telephones and lighting. However, this only applies to the area in which you work ie the study and not the whole house. Similarly, you can only claim for broadband when you need it for work, not for when the family is watching Strictly.
2. Business trips
Ah, that old expenses wheeze! It isn’t as generous as you think. You can deduct the cost of travel and accommodation for trips and between workplaces, as well as meals (not five-star) needed for an overnight stay. If your employer pays for this though, you can’t claim.
Higher rate taxpayers can get back the difference between the basic rate of tax and their higher rate on donations to charity via Gift Aid. For example, if you give £100 to the RSPCA, they will claim back the basic rate on tax on the money which bumps up your gift to £125. But, as you’re a 40% rate taxpayer, you can personally claim back £25.00 (£125 x 20%).
Cleaning and replacing uniforms or specialist clothing that you need for work is a deductible expense but not buying the stuff in the first place. Again, you can’t claim if your employer pays for it.
You can deduct the membership fees of professional organisations and subscriptions to publications if you need them for work. Union fees, however, are not always eligible.
Do you drive your own car for work purposes? Your employer is recommended to pay you 45p a mile for the first 10,000 miles and 25p for every mile after that. If you’re getting less, you can claim the difference as an expense.
There’s more information from the government here and check out our SMM guide to paying and saving on tax here. If it's all too much, you could consider getting an accountant. Their fees are - guess what - tax deductible!