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Clever Ways To Manage Your Travel Expenses
Some freelancers spend a lot of time behind the desk. Others barely sit down. Every self-employed worker is different. And, as a result, tax liabilities are never quite the same for any two people. Those who travel frequently, for example, may be entitled to claim expenses for their business-related journeys.
Sharpening up your travel expense management in 2018 can make a huge difference to your company, reducing your tax bill and improving your financial position.
If you’re out on the road regularly for work, be smart about travel expenses this year by following our list of tips…
Understand what you can claim for
Sadly, many freelancers are hit with extra charges after the tax-filing deadline because they’re misinformed. If your ideas of expenses don’t align with the taxman’s, you could get yourself into a bit a trouble. That’s why it’s crucial to understand what you’re actually permitted to claim for in terms of travel expenses.
The first thing to remember is that all transactions must be wholly business-related. If you’re travelling by train for a business meeting and stop off en route to see a friend, you won’t be able to claim this journey…because it has a personal element.
HMRC provide a list of what you can claim for on their website, with travel expenses covering fares, parking, fuel, servicing, insurance, hotel rooms and even meals in some cases.
Keep tight hold of your receipts
It’s likely the taxman will want some proof of any expenses you might claim for. After all, you can’t expect HMRC to simply take your word for it. That’s why you should always try to use your bank card (rather than cash) to pay for travel expenses. This way, you have digital proof of the transaction and a paper receipt to boot.
Any printed receipts can be sent as part of a paper tax return, but in the modern era it’s now possible to upload receipts digitally with tax software.
So, whatever the travel expense might be, always attempt to obtain proof of purchase. There’s a strong chance you’ll need it come tax time.
Take advantage of tools
Effective travel expense management comes down to record-keeping. Keeping a diary of all your business trips is recommended, but there are also a great selection of online tools that can help you manage your expenses.
FreeAgent, for example, offer a free trial for their software – which lets you manage your business and stay on top of trips from anywhere. Trabee Pocket, Concur and Tripcatcher are three examples of apps that can be easily downloaded to your smartphone – letting you record travel expenses as you go.
But the most powerful tool of all is your very own accountant. Bright Ideas Contractor & Freelancer can take care of you; telling you everything you need to know about self-employed travel expenses. Set up a free consultation with us right now to find out more.