How to reduce your tax bill when self employed

Before we start looking at ways you could reduce your tax bill, I wanted to share how I view it.

I see my tax bill as success. If you aren’t liable to pay tax you aren’t making money, so look at it that way – be proud that you have a business that’s bringing money in – not many people manage that!

So, the real reason you’ve really clicked on this blog… how can you legally reduce your tax bill?

There are a few ways:

Make a donation to charity. My charity of choice is The Pituitary Foundation. A Bristol based small charity who do huge things for people like me. Pop this expense under ‘charity donations‘.

Online courses: Is there something you’d like to learn that you’ve been putting off? Now could be a good time to make that investment and pop it under ‘staff training‘.

Events: What events have you been getting FOMO for? Janet Murray‘s are a favourite of mine – it’s a great time to invest in that event everyone’s going to. Pop this expense under ‘staff training‘ too, or you might even have an ‘events‘ category.

Join a membership you’ve had your eye on for a while or upgrade to annual membership if you’re already in one. Many allow you to join on a monthly basis, so you can ‘try’ it out before you make the big annual investment. Pop it under ‘staff training‘ too.

Buy those business books everyone keeps banging on about – this one’s quite good. Pop this expense under ‘books and journals

Bulk buy anything you use throughout the year, like stamps, printing paper, toner cartridges. Bulk buying usually saves a few pennies anyway. These expenses will come under ‘stationery‘ or ‘postage‘ for stamps.

Claim for everything you can: If you work from home you know you can claim a bit for household bills, right? Have a look here for more information. This one comes under ‘office costs‘.

Marketing: You know marketing your business needs to be consistent to attract an audience and create that Know, Like and Trust. So is it time to invest in that? Marketing gets you a ROI, so spend now and reap the rewards in the next financial year. Depending on your categories, and your accountant’s advice – this expense will probably go under ‘subcontractor‘ costs

Software: Get ready for Making Tax Digital and invest in some accounting software so it’s not a mad panic when it becomes mandatory. I use and recommend FreeAgent – if you’d like to use it too, use my 10% off code: 46dac370. This one goes under the category: ‘computer software

Bring planned expenditure forward

If there’s anything else you’re thinking of investing in for your business at some point, it might be a good idea to do it now before to reduce your tax bill.

If you are ever in any doubt about tax please contact your accountant. I am NOT an accountant so my advice and tips are based purely on my bookkeeping qualification and experience. I also find the HMRC Twitter account to be good at responding to questions.