Tax deductions for the self-employed in 2018

The self employed have a determined number of expenses that can be deducted from their income as legitimate business expenses. In this article, chartered accountant María Luisa Cervantes, senior partner at Cervates Alarcón Consulting, gives an overview of the most common deductions available for the self-employed person in Spain (autónomo) for the 2018 tax year.

The actual list of available deductions will vary according to the activity of the tax-payer, so personalised financial advice should be taken before attempting to claim any deductions on your income tax.

The obvious ones

There are expenses which are logical to the running of your business which can be claimed for in their entirety.

For example: the rent on your office, purchasing inventory, advertising or paying for an accountant.

These invoices can be deducted as a matter of course, because they are directly linked to your activity. Other “obvious” expenses which you should also take into account are deductions such as your self-employed monthly tax payment (cuota del autónomo), or social security payments for any employees.

And in 2018 it’s easier than ever to claim for training courses when they are directly linked to your business activity. You can even claim the cost of obtaining a Master’s degree or similar!

Daily expenses

As from 2018, the self-employed are allowed to claim up to €26,67 a day for direct expenses on food and drink, but only on working days. Payment must be made either electronically or via food vouchers.

For more, read our article Using food cheques to boost a salary.

Health insurance

Health insurance and direct medical claims can be claimed by the autónomo on their IRPF. You can also include the cost of taking out private medical insurance for your spouse and children under the age of 25.

You are allowed to claim up to €500, although the limit increases to €1,500 if a member included in the scheme suffers from a disability.

Private vehicle

A self-employed worker can claw back part of the IVA of the expenses of their personal vehicle.

The capital of fuel, insurance, parking costs, tolls and routine garage work expenses can all be claimed for, but only up to 50% of the invoice cost, although if the vehicle is used exclusively for work purposes up to 50% of the fuel IVA can be claimed back, although a strict record of usage must be kept.

If the private vehicle is used to carry passengers or merchandise then you can claim up to 100% of the IVA levied on the above bills, although you may be required to justify the exemption.

Working from home

If you work from home, you are entitled to claim for justifiable costs.

The mortgage, water, electricity, phone and internet can all be claimed for, although the rules surrounding this has traditionally been murky and the situation has now become worse.

The Tax Office now allows you to claim up to 30% of your home as being dedicated to work. Of that, you can deduct 30% of the costs associated to the work portion of your home. 30% of 30% is not a lot.

You also need to declare which portions of your home are being used for work purposes.

Travelling

If you are travelling by public transport for work purposes, or staying in hotels, you can deduct all real expenses incurred.

But don’t try to claim for…

Things purchased in supermarkets, or clothing (unless you are buying clothes that can be claimed as a uniform).

Nor can you claim for fines, sanctions or other embargoes.

For more regarding the self-employed

read our article Big changes happening for the self-employed in 2018.

Or contact us. We’re always happy to help!

Maria Luisa

María Luisa Cervantes is a chartered accountant who graduated from the University of Granada in 2002. Founder of Cervantes Alarcón Consulting, she is an experienced accountant and financial advisor who is a member of the Almería guild of economists. With more than 15 years of experience in business administration and international trade, she is also a subject matter expert in the UK - Spanish bilateral agreements which cover the rights of expats to live, work and retire in Spain.