10 Tax Deductible Expenses for the Self-Employed in Ireland

10 Tax Deductions for the Self-Employed in Ireland

If you’re self-employed or receive income from non-PAYE sources, you must register for self-assessment. Self-assessment is where you calculate the income tax you owe for the tax year yourself. This needs to be completed every year when you file your tax returns. 

Fortunately, to reduce your tax liability, you can make tax deductions for allowable expenses that were incurred while running your business. There’s quite a wide range of tax deductions that can be used to pay less tax on your taxable income.

This helpful guide identifies ten tax deductions for the self-employed; detailing what can and can’t be claimed as an allowable expense.


Table of Contents

Consultancy & professional fees

Advertising costs

Rent, rates & power

Wages, salaries and other financial charges

Bank, credit card and other business loans

Interest on bank and other business loans

Insurance costs

Car, van and travel expenses

Repair and maintenance of plant and equipment

Purchase of assets


1. Consultancy & Professional Fees

If your business has incurred professional fees over the course of the year, we’ve got food news for you. All consultancy and professional fees that were fundamental to the operation of your business are allowable expenses. Some examples of qualifying professionals would be accountants and solicitors.


2. Advertising Costs

Effectively promoting your business is not only critical to your success, it is also a tax-deductible expense. Any costs arising from advertising in the media or directory listings, direct mailers, online promotional activity (websites, emails etc.) are all allowable expenses.


3. Rent, Rates & Power

Your premises, and the associated expenses of keeping them running, are likely to be among the biggest of your business overheads. Luckily, any rent you pay for your premises can all be claimed as an expense. Additionally, you can claim for business and water rates, lighting, heating and power costs, and even security fees.

Calculations get a bit trickier for those working from their own home. In such circumstances, only a percentage of the running costs can be claimed; based on the proportion of the home used as an office. Any non-business parts of your premises cannot be claimed for.


4. Wages, Salaries and Other Staff Costs

If you’re paying other people, you can offset certain costs against your taxable income. This includes their salaries and bonuses, as well as any recruitment agency fees, subcontract labour costs and employers’ national insurance contributions.

You cannot claim for any wages you pay yourself. This includes any other drawings made from the business for goods or services that are for personal use or unrelated business.


5. Bank, Credit Card and Other Financial Charges

Charges from financial institutions or other creditors can quickly add up, but at least they can be deducted from your taxable income. All business-related bank, overdraft and credit card charges qualify for tax relief, as well as any interest owed on hire purchase agreements.


6. Interest on Bank and Other Business Loans

Interest charged on any business loans from a bank or another financial institution can be claimed when filing your income tax return. For clarification, you can only claim for the interest charged and for any administrative or penalty charges; the repayments you make do not qualify.


7. Insurance Costs

Any insurance premiums you pay over the course of the year are deemed to be valid expenses. This includes professional indemnity and property insurance policies. The cost of the premiums can be deducted from your taxable income to reduce your tax liability.


8. Car, Van and Travel Expenses

When travelling on business, all vehicle expenses such as fuel, insurance, repairs, breakdown cover and maintenance fees qualify for tax relief. So do other transport costs, like bus, train, taxi and airline fares. Hotel room charges and the cost of meals while away on business also qualify for tax relief.

If you drive a car for both business and personal purposes, only the business portion is allowed as a deduction.


9. Repair and Maintenance of Plant and Equipment

If your plant and equipment needed repairs or maintenance during the year, you can claim back the costs when you submit your income tax return. This also covers the renewal of small tools and other items of equipment.


10. Purchase of Assets

The depreciation in the value of assets can be claimed in the form of capital allowances. You can claim capital allowances for the wear and tear of assets purchased for your business. In the case of landlords, this includes furniture or white goods (example: fridge, dishwasher) purchased for their rental properties. The current rate for these allowances is 12.5% of the cost, which is spread over eight years.

Working for yourself is hard enough without having to worry about paying too much tax. Nevertheless, this could well be the case, if you are not taking full advantage of your allowable expenses and deductibles.

Feel free to contact our team of tax experts. We have a wealth of knowledge on tax deductions for the self-employed and we are happy to help. The cost of a standard income tax return for self-employed individuals starts at €299 (VAT included). Get a quote today.