Tax Rebates & Refunds

Types of tax deductible expenses pt.2

September 15, 2012
Posted in Income Tax — Written by Chris

Self-employed workers and business owners must file a tax return every year, in which they will include full details of their earnings, other income and their tax-deductible expenses.

We have already looked at a few of the most common types of tax-deductible expenses in part 1 of this guide. Now let’s look at a few more:

• Insurance premiums
• Interest on business loans
• Business proportion of rent, as well as power and water bills
• Salaries paid to staff
• Other staff costs

Capital expenditure

Another type of tax-deductible business expense is capital expenditure. This relates mainly to one-off costs, such as the cost of buying new business premises. It can also include:

• Costs of buying new business vehicles
• Costs of improving business assets
• Costs of purchasing machinery, computers or furniture for business use

All of this sounds quite simple until you actually sit down to complete your tax return and have to work out the business proportion of all your expenditure. However, if you follow the HMRC guidance, you should be able to complete your tax return accurately. If you make a mistake, there is always the option of claiming a tax rebate at a later date.

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