As a private tutor when completing your annual self assessment tax return there are a number of business expenses to be aware of. It is important that you claim the correct expenses and complete accurate expense calculations to avoid any unexpected letters from HMRC!
Here are six key businesses expenses to look out for;
1. Vehicle mileage.
Travelling to and from pupils homes can be a time consuming part of a private tutors job. You can claim 45p per mile for the first 10,000 business miles during the tax year and 25p per mile above 10,000 miles.
You can also claim for car parking, taxi, train and bus fares.
2. Working from home.
This has become much more common for private tutors due to coronavirus as lessons move from face to face onto Zoom and other video conferencing platforms. If you average 25 to 50 hours working from home in a month then you can claim a flat rate of £10 per month, this increases to £18 per month for 51 to 100 hours per month and £26 per month for more than 100 hours per month.
Alternatively, you can calculate the working from home expense yourself by totalling your yearly bills (allowable bills include gas, electric, council tax, internet and mortgage interest or rent) divide that by the number of rooms in your property then divide that figure by seven (the number of days in the week) then times that figure by the average number of days spent working from home per week.
This is a good one for Maths tutors!
3. Mobile Phone.
You might assume that if you use a personal mobile phone for business use then this can't be claimed as an allowable expense - this is incorrect. A percentage of the annual phone bill can be claimed as an allowable expense based on business usage.
For example, if your total phone bill for the year is £480 and 70% of the phones usage was for business purposes then you can claim an expense of £336 (£480 x 70%) for the tax year.
4. Textbooks and other learning materials.
Any textbooks or other learning materials used in the course of your work can be claimed as an expense at the full value paid. This includes e-learning materials in addition to stationary.
5. Professional subscriptions and professional services.
Professional subscriptions that relate to your private tutoring business can be claimed in full as an allowable expense, this does not include student loan repayments.
You can also claim costs for professional services for example using the services of a lawyer or an accountant provided of course that this relates to your business.
If you have taken out professional indemnity or public liability insurance for your business then this counts as an allowable expense. Although many private tutors take out insurance it is not a legal requirement to do so.
This article was written by Will Farmer MAAT.
I have many clients that are private tutors with self assessment tax returns priced at £80.
If you would like my help or advice then please email email@example.com or call me on 07914 794744.
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