The short version: Simplified expenses are flat rates you can use instead of calculating actual costs for certain business expenses. They’re designed to make life easier for self employed people.
What can you use them for?
Working from home (Home Office Allowance based on hours worked), vehicle costs (mileage allowance per mile), and living at your business premises. Other expenses still need actual receipts.
Is it better than actual costs?
Sometimes. If your actual costs are low or you hate keeping receipts, flat rates are simpler. If your actual costs are high, claiming the real amount gives you a bigger deduction. You can’t switch methods for vehicles once you’ve chosen.
Who can use them?
Sole traders and most partnerships. Limited companies can’t use simplified expenses in the same way.
Not sure which method saves you more? We can run the comparison for you.
