Deductible expenses

A deductible expense is one incurred in producing income, and only to the extent it served the business. That is where the percentages come from: a car that also drives privately, a phone and internet line the household also uses, a home office measured as the room against the rest of the flat. Every percentage has two preconditions, an invoice in the business name and a record made at the time, and an expense with no document is not deductible however obviously business-like it was. The guides here cover the categories that come up for most freelancers and the ones people most often get wrong.

One distinction is worth knowing before you start recording: a running expense comes off in full in the year it was incurred, while equipment that serves the business over time is spread across several years through depreciation. A computer, office furniture or a vehicle is not a single month's expense as far as income tax is concerned, even when it was paid for in one go. That difference changes the shape of the year you bought in, not only how much is recognized at the end.