Freelance - tax deductible expenses

Discussion in 'Accounts & Finance' started by Yvie72, Aug 11, 2019.

  1. Yvie72

    Yvie72 UKBF Newcomer Free Member

    2 0
    hello,
    I have been self employed previously & understand allowable expenses .

    However, I’m about to embark on becoming a freelancer.
    The company that I’m sub contracting for will paying me a day rate for my service , plus mileage @ Hmrc rates & all related expenses .

    How do I process the mileage through my books ie, can I still claim for my own car insurance etc ?
    As I will be invoicing for Mileage ,will I pay tax on this or will I still qualify for these miles to be tax deductible ?

    I’m totally confused regarding this matter and would appreciate any help please :eek:)
     
    Posted: Aug 11, 2019 By: Yvie72 Member since: Aug 11, 2019
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    15,048 3,189
    Being a freelancer is exactly the same as being self employed, you can set all your expenses incurred in carrying it out against your income.

    You should invoice your client for everything they agree to pay for and declare it as self employed income. As self employed you have the option to claim the business proportion of your motor expenses or 45p per mile.
     
    Posted: Aug 11, 2019 By: Scalloway Member since: Jun 6, 2010
    #2
  3. TheCyclingProgrammer

    TheCyclingProgrammer UKBF Regular Free Member

    1,074 219
    The mileage you are invoicing to your client is just taxable income like any other, however assuming your travel qualifies for business mileage you will be able to claim the equivalent amount of mileage on your tax return.

    As this should be at the same rate as what you’re billing your client they should cancel each other out so in effect you aren’t getting taxed on the mileage element of your invoice.
     
    Posted: Aug 11, 2019 By: TheCyclingProgrammer Member since: Jul 15, 2014
    #3
  4. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,700 2,354
    As has already been said as a freelancer (assuming you aren't working via a limited company) you are self employed. HMRC actually produce some good guidance here which may help.
     
    Posted: Aug 12, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
    #4
  5. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,303 3,187
    What sort of 'related expenses' are they paying, as some of those may not be tax deductable
     
    Posted: Aug 12, 2019 By: Newchodge Member since: Nov 8, 2012
    #5
  6. Victoria_V

    Victoria_V UKBF Regular Full Member

    114 15
    Hello! If you are a freelancer (assuming you are not doing the freelancing through a LTD company), you are a sole trader and you may probably have to re-register with the HMRC as a sole trader if you haven't done so already.

    https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed

    When you raise your invoice to your customer, you should be able to invoice them for 45p per mile (which is the current HMRC rate).

    You would have had to spend money on car maintenance costs such as fuel, insurance, other maintenance costs for each business mile you have travelled on in your car. HMRC calculates the total of this as 45p per mile, and this is what is an allowable expense on your tax return using what's called the simplified expenses method.
    https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles-

    This will then essentially net out the income that you would have received from your customer for this mileage with the expense that you are claiming on your tax return. There will be no profit made from this, therefore no additional income tax should be payable.
     
    Posted: Aug 12, 2019 By: Victoria_V Member since: May 29, 2019
    #6
  7. Yvie72

    Yvie72 UKBF Newcomer Free Member

    2 0
    Mileage , meals and hotels / flights if required.

    Thanks
     
    Posted: Aug 14, 2019 By: Yvie72 Member since: Aug 11, 2019
    #7
  8. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,303 3,187
    Generally meals are only tax deductible if there is an overnight stay involved.
     
    Posted: Aug 14, 2019 By: Newchodge Member since: Nov 8, 2012
    #8