Find everything about the business expenses will help you claim as a self-employed sole trader. Claiming as much money as possible should be one of the strongest possibilities for running a business. While working for yourself, the last thing to look for is the taxes you need to pay.
Through this blog, you will come to know about the right amount of tax to claim through various ways. Whether employed for a year or a few months, sole traders can reduce expenditure and allowances concerning their business. If you are interested to learn about tax-saving opportunities, here are a few things to look for.
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Claims regarding work clothing and uniform
Most importantly, you can claim tax back for uniforms purchased from the company’s funds directly. Check for the allowance available and make sure that you use it appropriately. It includes the cost of protective clothing required for tradesmen to wear. It means with the branded uniform, you can ask for money for protective costumes. A sole trader tax accountant can provide you the details of taxes to claim regarding work clothing and uniforms.
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Motor and travel running expenses
Claiming travel expenses is another thing to look for by the sole trader. Some aspects like travel and mileage are there to keep in consideration as a sole trader. In many situations, they might not have a vehicle designated for business use only. Even though it is used to meet customers or attain business needs, many can be used for other purposes like family grocery shopping, etc. It is why allowable business expenses are not permitted for businesses like parking, fuel, breakdown cover, servicing, and insurance. In addition, it does not cover travel from work and home, any non-business driving costs, etc.
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Claim the price of buying a vehicle
You can also claim the price involved in buying a vehicle, and the experts can provide the details of how to do it. In that way, you can save a massive amount of money to a great extent. Business expenses can be claimed for various other things like air, taxi, or train fares for business purposes. If there is a meeting or industry seminar to a distant location, you can also include the price of the meals or hotel rooms.
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Leasing cars and vans
Sole traders must also consider the expenses of leasing cars or vans for business purposes. Leasing a vehicle through the business will count as a fixed asset. With that, you can claim capital allowances on the purchase value and decrease the taxable profit.
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Other equipment and tools
If you are self-employed and working in a field that requires machinery and tools, you can claim back tax on maintaining and replacing your essential equipment. You can also ask for a claim relief while purchasing the item, and it is done either through an allowance expense or capital expense. It depends on the tool or equipment that you are using.
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Household expenses
Working from home as a sole trader also allows you to claim for a portion of household bills. It includes even the level of business use a little. The claims should be based on the total household bills, the duration you have used, and the area. Make sure that the space you are using should be for business purposes only. Some people allow the room to do homework at the end of working hours.
But it would be best to avoid this as the space is dedicated to only commercial purposes. If you want to collect more information about this, getting in touch with a tax advisor Perth will be helpful.
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Allowable deductions
Being sole traders, you must be eligible for allowable deductions that are required to run the business. You can claim under operating expenses a list of things: bad debts, advertising, home office expenses, telephone bills, training and education, professional memberships, etc.
In addition, you can claim depreciation on capital expenses for longer life over several years. It includes furniture, computers, electrical tools, plants, and equipment, etc. If there are any expenses for private and business use, make sure to claim only the business portion. A tax return Perth professional can help you in this as they have helped many sole traders get a good amount as a tax return.
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Unusual an additional claims for sole traders
Are you aware of prepaying your expenses for less than a year and getting a tax deduction? Being a sole trader, you should be aware of these things. It will help in the expenses of training events, business travel expenses, and business asset repairs. The best way is to speak with experts who can provide details of the additional claims.
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Industry-specific tax deductions
Which industry do you work in is another thing to look for? It will affect the tax deductions. For example, mechanics have the right to claim the cost of using a car for traveling between home and work, transporting bulky equipment, etc. Travel agents can claim expenses with industry promotions, attending conferences that include travel insurance, passport fee, etc.
Read More:- Top Trading Tools To Avoid Mistakes While Trading
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Staff costs
If you are employing someone, you can claim the costs to do the work. It includes pensions, bonuses, salaries, agency fees, benefits, subcontractors, etc. But as a self-employed, you do not have permission to claim compensation for yourself. Any remuneration paid to family members should be counted over the regular pay rate.
Look for a trusted and qualified tax advisor
A Sole trader tax return is an essential thing that you must not ignore at any cost. The laws and regulations with taxes keep on changing over time. But always, it might not be possible for you to keep track of all these things. However, by getting in touch with a tax advisor, you can be aware of all the recent updates. They assist sole traders with everything in place in terms of taxation affairs. They will also inform them of the changes that have been taking place in this sector.