As a freelance social media manager there are a ton of things you need to run your business, and your clients social platforms professionally. And when you first start out as a freelancer that can seem really expensive.
We noticed the same question popping up in The Hub recently ‘can I claim XYZ as expenses' and more often than not the answer was a big fat yes.
Which then often led to comments from other social media managers who didn't realise they could claim expenses at all! If you are self employed and spending any money in your business then read on.
We asked finance expert, Laura Moss to share her advice on business expenses. Here's what she said:
1. Keep things simple.
2. Don't get caught up worrying about the categories your expenses fall under, until you reach approx £83K HMRC only need to know a total expenses figure not the categories.
3. You don't need software and it can in fact make it all too confusing, especially when using a software that's designed for Limited Companies. A simple spreadsheet can work just as well.
6 things we claim as expenses in our social media businesses.
#1: Scheduling tools
If you aren't using a scheduling tool for your clients because of the price then a) you should be charging it back to them and b) you are probably not aware you can put it against your expenses.
A scheduling tool will undoubtedly make your life easier and as it's a business expense you can put it in the expenses column on your financial reporting sheet (you have one of those right?)
If you do want to save some money then ContentCal have kindly given us a discount to share with you so click here and use code LAURA to get a $30 credit on your account.
#2: Phone bill
Using your phone for business? Then you should be putting your bills down as expenses.
This applies whether you are using it for one client or all your clients, using it to engage or post content, reply to emails, talk to clients etc. If your primary use is business then you can claim 100% of the costs, however if you use it for personal as well then you can still claim a percentage.
Which means if you want a new phone… guess what… a percentage of that could be a business expense too!
#3: Training, memberships and ongoing professional development.
This one is a little more tricky but if you are paying for any sort of training to help you in your business then you can probably claim it as a business expense.
We do everything we can to stay on top of our game so for us this includes courses, workshops, online guides, and memberships.
The training courses must be related to your business. You cannot claim for training courses that help you:
- start a new business.
- expand into new areas of business, including anything related to your current business.
We invest heavily in training to ensure we are offering the best service to our clients, but also to bring our tax bill down!
#4: Your computer
We don't have fancy Macs just because we love Apple (although we do!)
We know that having the best laptop / desktop available will make our jobs quicker and easier and if it comes with a price tag then that's fine, because it is a business expense and we can claim it as such. Meaning it comes off our profit and brings our tax bill down.
Got a thing for planners and pretty pens? If you need them for your business then they can be claimed as an expense! This also includes postage, printer cartridges, post-it notes etc. All those things that you use on a daily business without even thinking about it.
# 6 Household bills
If you work from home HMRC allow you to use ‘Home as office' allowance based on the hours worked at home. This allowance goes towards your household bills; broadband, telephone, electricity, gas etc.
Don't forget to tell your insurer that you work from home in case it affects your policy.
Why should you be claiming expenses at all?
If you are self employed your tax bill will be calculated based on your profit. Profit is your annual income minus any business expenses.
Even if you don't think you'll hit the tax allowance threshold it is important to keep a track of your business expenses so you know what you are spending to work with a client and your rates can reflect that.
We have lots of advice and tips about managing your business finances from finance expert Laura Moss within The Toolkit which will be available again in 2020.
Disclaimer: We are not accountants and strongly suggest you take advice from an accountant when it comes to doing your tax return so you know what you can and can't claim as a business expense.
by Laura Moore
Laura is the co-founder of The Social Media Managers Hub and also supports businesses to grow their audience and generate leads with Facebook ads.