How to Track Your Expenses for Your Side Gig in the UK

Managing finances for your side gig is crucial, whether you're a freelancer, delivery driver, or juggling hobbies alongside your main job. Not only does it ensure HMRC compliance, but it also helps you understand your gig's profitability. Here's a concise guide to help you track expenses, stay organised, and save time.

Why Track Your Expenses?

Tracking expenses isn’t just a formality—it’s an essential practice for managing your finances.

1. Claim What You’re Entitled To

UK HMRC allows deductions for business-related expenses, lowering your tax bill. Examples include:

• Travel costs like fuel or public transport for work purposes
• Home office expenses such as electricity and internet
• Professional costs, including software subscriptions or insurance

Explore HMRC's guide on allowable business expenses.

2. Stay HMRC-Compliant

Accurate record-keeping avoids penalties and ensures you meet Accounting standards, particularly under Making Tax Digital (MTD).

3. Understand Profitability

By comparing costs with income, you’ll discover areas to optimise or grow your side business.

Effective Expense-Tracking Tips

Here’s how to simplify the process and avoid errors.

1. Open a Business Bank Account

Keep your business and personal finances separate. A clear divide makes bookkeeping easier and minimises mistakes. Check out available business accounts.

2. Use Accounting Software

Automate expense tracking with platforms like QuickBooks or Xero. These tools link to your bank and categorise your spending for you.

3. Save Receipts Immediately

Don’t rely on memory. Use apps like Expensify to store receipts digitally and log invoices in real-time.

4. Claim Deductions Regularly

Don’t miss out on deductions. Claim for costs like mileage, equipment, or marketing expenses. Keeping detailed records ensures compliance in case of an audit.

Common Mistakes to Avoid

1. Mixing Personal and Business Accounts
   Blurred finances complicate tracking. Stick to separate accounts.
2. Failing to Save Receipts
   HMRC requires proof for deductions. Keep physical or digital copies.
3. Procrastinating on Updates
   Update expenses weekly or monthly to avoid end-of-year headaches.

Save Time with an Online Accountant

Accounting software helps, but an experienced accountant can streamline the process further.

Benefits of Hiring a Chartered Accountant

• Maximise Savings by identifying allowable deductions you might miss
• Stay Stress-Free as they handle Tax Returns, track expenses, and ensure compliance

Discover how an online accountant can help.

Simplify Your Side Gig Finances

Managing side gig expenses doesn’t have to be overwhelming. With organised records, smart tools, and professional support, you can focus on growing your gig while staying HMRC-compliant.

At Virtue Accountants, we specialise in helping UK freelancers and side hustlers stay on top of their finances. From tax support to full-service bookkeeping, we make accounting effortless.

Get a Free Quote Today and see how we can help you save time and stress!