Small business advice service Informi has analysed the average post-tax income of popular self-employed roles, as well as data on common expenses for each profession, to reveal how much savings could be missed from not claiming easily deductible allowances.
Beauty therapists take home an average of £8.25 an hour, or £14,543.36 per year after tax and before allowable expenses, according to the research.
They also arguably have the highest value of expenses out of the self-employed roles analysed; renting a space in a salon could put beauty therapists on the back foot if they don’t claim their allowance.
If claimed, these expenses could return around £1,112 per year.
Some allowable expenses, like the cost of materials, tools and rent, can seem self-explanatory, but there are a number of things you can claim on that aren’t just physical purchases.
Vehicle costs are also a huge overhead to remember to claim on as a self-employed person, especially if you’re a mobile therapist who regularly travels for work.
Find out what business expenses you can claim as a sole trader or limited company here.
“Although there’s ample time until the next tax return deadline, keeping a record of your expenses as and when they arise is the key to ensuring you maximise your tax efficiency while being self-employed,” said Huw Moxon, marketing manager at Informi.
“The last three years haven’t been easy for those in self-employment. First the pandemic threw everything into disarray, and now the cost-of-living crisis is causing profits and revenues to drop while business (and personal) expenses increase.”
“Not to mention tax rises, which will no doubt eat into the earnings of sole traders and freelancers who don’t have a big corporation to fall back on in times of financial uncertainty.”
“Tax can be a huge expense for the self-employed, and there’s nothing worse than realising you owe more than you thought when the deadline to file your tax return comes around.”
Moxon continued, “Many don’t realise the various costs which can be negated via allowable expenses. These are essential costs that help keep a business running, that businesses don’t have to pay tax on.”
You can view the research in full here.
Article written by Ellen Cummings and originally featured here
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