Simplified expenses

Simplified expenses are an easier way of calculating some of your business spending using standard rates instead of working out the actual costs.

You don’t have to use them. It’s your choice and you should choose whichever is better for you. Not just financially but also in terms of the time and administrative burden each method takes.

Who can use simplified expenses?

You CAN use them if you are:

A sole trader, or;
A business partnership that has no companies as partners

Who can’t?

They CANNOT be used by:

limited companies, or
business partnerships involving a limited company.

The types of simplified expenses

You can use simplified expenses for:

business costs for some vehicles
working from home
living in your business premises

How to use simplified expenses

To work out your expenses:

Keep records for your
1. business milage
2. hours you work at home, and
3. how many people live at your business premises over the year.
At the end of the tax year use the flat rates for:
1. vehicle mileage
2. working from home, and;
3. living at your business premises

Include these amounts in the total for your expenses in your Self Assessment tax return.

Help with Simplified Expenses

You can use this handy checker to compare what you can claim using simplified expenses with what you can claim by working out the actual costs. This will help you work out if simplified expenses suits your business.

Get support from a Licensed Accountant

If you are not confident with any of this or don’t have the time, getting a licensed accountant to do it for you can actually save you money. It can free up your valuable time which you can use to concentrate on your business. You can also benefit by knowing it has been done correctly and on time. Mistakes can be costly. As can missing the deadline.

If you need to complete a self assessment tax return for the first time or have decided that you need some assistance, as your HMRC registered agent, I can help.