Tradesmen, you’re not doing it right if you’re not looking for a benefit you can claim. Trust us when we say we’ve helped countless individuals claim on a shitload of different things.
As a sole-trader, which make up most tradesmen in the UK, you have more power than you may think to claim back certain things.
These expenses (as they’re known) will be free from tax, giving you back some spending power and more money in your pocket.
A good example is to lay out how much you actually earn vs what you can expense. So say your turnover was £35k, and you claim £5k in expenses you’d only pay taxes on the remaining £30k. Easy!
So what can I claim?
First, here are our top 5 expenses you can claim:
- Equipment – Shovels, drills, and power tools. BOSH.
- Resources – Anything you need to complete the job and make the client happy.
- Lunch on the road – It’s hungry work, but all the better if you take the whole team out for a Friday lunch or a round of breakfast baps.
- Fuel – Make sure you keep a record of your mileage.
- Mobile phone – Find out how to keep your personal and work calls separate below…
It’s easy to get excited and think “oioi here we go, I can claim for everything!” – but obviously there is some red tape to be aware of.
Basically, stuff like equipment, tools, work gear or anything you use specifically for your job can be claimed for, no problem.
But if you have one mobile phone you use for your personal stuff as well as your business, you won’t be able to claim for all of that.
Is there an easy way around it? Get a second phone you just use for work. Or alternatively, you can just claim for the business calls you use – but this means you’ll have to put in some extra legwork like call logging.
What else should I be aware of?
If you want to claim on something larger you buy for the business, like a van, for example, this can be done via something known as plant and machinery.
These are part of capital allowances and allow you to get back the money you paid for something, provided you keep them for a long time.
They’re classed as business assets and will be seen as something integral to the future of your business.
HMRC says: “You can deduct some or all of the value of the item from your profits before you pay tax. In most cases, the value is what you paid for the item.”
Speak to a pro
Business expenses can be a bit of a minefield, especially when temptation is there to put everything through the business.
But in our experience, if you’re not sure, it’s definitely worth talking to a pro.
We’re happy to talk to you about expenses, and everything in between, in order to give you some peace of mind and clarity on the matter.