Tax reporting for sole traders, partnerships and LLPs

What the Tax Return Box options mean when you're setting up a new spending category or edit an existing one for a UK sole trader, partnership or LLP.

This article deals only with sole traders, partnerships and LLPs. There are separate articles for Limited companies and Universal accounts.

Tax Return Box

When you set up a new spending category or edit an existing one, you’ll be asked to choose the Tax Return Box for that category.

These correspond to the box names on your Self Assessment Tax Return if you’re a sole trader, and to the box names on your Partnership Tax Return if your business is a partnership or an LLP.

Choose the name from the list. Pick the one that’s most appropriate for the category you’re setting up.

For example, if you’re a photographer and you want a new category for small digital camera accessories, you'd probably choose Other Business Expenses.

admin expenses category - choosing which tax return box should appear on the income tax return

Allowable for Tax?

You also need to choose whether this category is allowable for tax or not.

The box is ticked by default. Leave the box ticked if the category is allowable, untick it if it’s not allowable.

tax return box - admin expense category - selecting if allowable for tax

"Allowable for tax"? Stop talking accountantese.


That just means whether you’re allowed to take this expense off your income when you’re working out the profit that your tax is due on.

Most business expenses will be allowable, but some, such as entertaining anyone other than any staff your business employs (which doesn’t include you I’m afraid) will not be.

Check with HMRC or your accountant, if you have one, if you’re not sure whether an expense is allowable or not.

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