HMRC - Deductions

If you’ve registered as self-employed, you can deduct some of your business’ running costs and expenses from your turnover to calculate the amount of your profit that you should pay tax on (your “taxable profit”). 

These deductions don’t include any private purchases.

If you run your own limited company, however, you should deduct any business costs and expenses from your profits before tax. 

Expenses can include: office costs (such as paper or phone bills); travel costs (such as fuel or parking); uniforms; staff costs; stock or raw materials; financial costs (such as insurance or bank charges); heating; lighting; business rates; and advertising or marketing.

If you use something for both business and personal reasons, you can only claim expenses for the part of the costs associated with your business.

• You should always try and resolve any problems with HMRC by talking with the person who has been dealing with you first.
• If this is impossible or has not resolved your issue, you should use Resolver to contact them.
• HMRC operates a tiered complaints system. Complaints will go through two tiers of service.
• If you are still unhappy, you can ask your MP to escalate your complaint to the Parliamentary and Health Ombudsman.

If you believe HMRC has not correctly followed procedure, it's always worthwhile to consider contacting them via Resolver. HMRC may offer compensation for any distress, delay, damage caused, or costs incurred by HMRC (such as the cost of having to hire an accountant).

It's worth knowing that HMRC have the right to take enforcement action to reclaim any debts (under certain conditions).

You should be aware, however, that HMRC field agents have no right of seizure. They might take note of the things you have (your assets), but they can't take any on the spot.

HMRC can level penalties for late payment. It's always worth contacting HMRC if you believe you might have been incorrectly penalised (or if serious circumstances stopped you from paying on time). HMRC will often consider any reasons you might have for late payment.

You should try and correct any mistakes with your tax as soon as possible.

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