Commonly missed expenses that could help to save tax

August 10, 2022

Introduction

Missing expenses from your self-assessment or company accounts can result in paying higher taxes. Legitimate expenses reduce tax liability, and for this reason, ensuring that all appropriate expenses and allowances are included in your tax submissions is an important task.

Common mistakes include:

1. Not checking your tax code.

If your personal tax code is incorrect, you could start to pay tax at a lower level of income, therefore overpaying. A personal tax code relates to a personal tax-free allowance and each year HMRC should issue you a tax code letter detailing the breakdown of your personal tax code. If you don’t have a copy of this annual letter or have any queries about the calculation, contact HMRC directly.

2. Not claiming tax allowances

There is a range of tax allowances that may be applicable depending on your personal circumstances. Examples include Married couple allowance, Agricultural relief or uniform allowances. Please be aware that these may only apply in certain situations, therefore due to complexities speak to your accountant to see if you are eligible.

3. Missing claiming working from home expenses

If you work from home, you may be able to claim tax relief for certain household expenses including utility bills and work calls. There are two ways of calculating working from home expenses; either as a flat rate or the exact costs incurred. For further information, speak to your accountant who can advise the most appropriate method.

4. Missing rental expenses

Should any of your income be received from renting property, there are a range of expenses that can be claimed if applicable including general maintenance, insurance and professional fees such as letting agents or accounting fees.

5. Forgetting travel expenses

Travel fully associated with work can often be claimed with the exception of journeys between home and the office. Travel expenses could include mileage, toll fees, airfares, public transport costs and parking if applicable. Linked to travel are also expenses when staying away from home including overnight accommodation and meals.

6. Missing professional membership costs

Membership fees and subscription costs to certain professional bodies are eligible as business expenses and therefore can also be claimed.

Get in touch

By using an accounting service, simple checks can be undertaken to ensure that personal tax codes are correct and fully maximised, appropriate expenses are claimed, and allowances are utilised, saving you money. Contact us today to book an initial consultation for assistance with expenses and allowances.