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As a self employed person you will be responsible for your own tax payments and also for the calculation of the amount you will need to pay. There are numerous deductions, allowances and reliefs provided by Her Majesty's Revenue and Customs that can be used to reduce your overall tax bill. So being aware of what they are could keep more of your money in your pocket. All business expenditure can of course be deducted but personal expenditure cannot; it is usually a wise idea to consult an accountancy professional in order to check that you are labelling expenditure correctly and not inadvertently claiming that a private expense was for work or visa versa that you are missing an important tax deductable business expense. As well as the most common tax deductable expenses there are some that often get missed, new businesses for example may not be aware that pre-trading expenditure can be counted as if it were incurred on or after the date that the business starts trading. So that any allowable expenses which you have incurred prior to the commencement of your business whilst setting up shop so to speak become tax deductable as if they happened while trading. There are often important one-off expenses that may also be over looked, if, for instance you have spent out to improve, replace or obtain an asset to use solely for your business HMRC may provide certain relief against this. It is not often mentioned that bad debts can be used to reduce your tax liability. When you are certain that a particular customer will not be paying, any balance relating to said customer can be written off against your turnover. You do need to be in no doubt that you won't receive payment in future accounting periods, but this type of bad debt write-off can apply in situations when for instance a debtor has gone out of business or absconded. Finally, if you are a member of a society, association, institute or professional body relevant to your business it is possible to take any subscriptions you may pay in to account when calculating your tax deductions. Do take professional advice from your accountant but never be afraid to mention these deductibles if you feel that they are applicable and have been missed, after all when the end result is a lower tax bill at the end of the year it is worth checking that nothing is left to chance.
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