The Complete Guide To Yoga Teacher Tax Deductions

Yoga teacher tax deductions can be difficult to calculate if you don’t have experience completing tax returns, but learning how to do them is hugely valuable.

We’re here to guide you through this process, and explore the following areas:

• What Should A Yoga Teacher Know About Tax Expenses?
• How To Claim Your Yoga Teacher Tax Deductions
• Full List Of Yoga Teacher Allowable Expenses

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What Should a Yoga Teacher Know About Tax Expenses

When you work as a self-employed yoga teacher, you’re legally obligated to submit tax returns to HMRC. 

This will determine the taxable profits you must pay based on the income you generated for that tax year.

Thankfully, your tax bill can be lowered when you submit evidence of business expenses incurred during this period.

Here are 8 useful points to help submit your tax return correctly:

1. Each tax year begins on the 6th of April and ends on the 5th of April the following year (for example, the tax year for 2021 - 2022 started on the 6th of April 2021, and ended on the 5th of April 2022).
2. Any earnings over £1,000 will need to be declared to the HMRC.
3. Each tax year, self-employed people have a personal allowance. This means that any earnings over this threshold will be taxed. 
4. For the tax year 2022/23, the personal allowance is £12,570.
5. The personal allowance can change at the beginning of each tax year, so make sure you understand what you’re financially obligated to pay.
6. If you began trading after the 6th of April 2022, you would need to register as self-employed by the 5th of October 2022.
7. You would also need to submit your tax returns no later than midnight on the 31st of October 2022 (paper forms) and by midnight on the 31st of January 2023 (digital submissions), along with the payment of your tax bill.
8. Business expenses can lower your tax bill, but these expenses must be directly related to your business.

Let’s look at a hypothetical example of the taxes someone might have to pay, based on their yoga teacher income, as well as their expenditures.

During the tax year for 2022/23, a yoga teacher earned £40,500.40 for this period.

The teacher has a list of different expenditures including a laptop for administrative tasks, travel expenses and purchasing online and physical advertisements.

These expenditures totalled £6,000 which are then deducted from their final taxable amount. The teacher would have to keep a record of these purchases to claim these expenses. 

If we deduct their personal allowance of £12,570, this would leave them with £21,930.40 which would be subject to taxation.

Once you have calculated what your final tax bill will be, there are different ways for you to pay this. You could have the payment processed within 24 hours through online/telephone banking or within 3 working days of posting a cheque or using a previous direct debit you have set up with HMRC.

You can explore the full list of these payment options by visiting the gov.uk website and also learning about how you can split these payments into weekly and monthly instalments.

How To Claim Your Yoga Teacher Tax Deductions

When you claim your tax deductions on your form, you’ll need to have the correct details and registrations completed.

To begin, you will need to register for self-assessment and Class-2 national insurance.

Payments of Class 2 National Insurance are applicable if you earn over £6,725 a year. You may also have other national insurance payments if you earn more. 

You will also need to create a Government Gateway user ID and password to complete information online. 

If this is your first time registering, you will receive a Unique Tax Reference (UTR). This should be sent to you within 10 days. You will need to include the UTR on a completed tax return as it is used to identify you.

When you have logged into your account, it is here that you will be able to declare any expenses that can be counted as deductions towards your final tax bill. 

It is important to monitor your account for any notifications from HMRC. Failure to act on these notifications may lead to your tax submissions being delayed, which could subject you to fines.

Tip: Hire An Accountant For Your Yoga Teacher Tax Deductions

Claiming tax deductions for yoga teachers can be a tricky process, particularly if this is your first time doing so.

It is something that needs to be done correctly to help you avoid receiving penalties, which is why hiring an accountant is a sensible and cost-effective idea.

Their qualifications and expertise will lift the burden of you making a mistake and receiving additional charges.

Plus, a good accountant will be able to pick up on potential expenses that you're likely to miss. In most instances this means that hiring an accountant will save you more money on your tax bill than it costs to hire them!

If you carry out research, you’ll be able to find the best accountant for you. Let’s explore some areas you should consider.

Considerations Before Hiring An Accountant To Help With Tax Deductions For Yoga Teachers

Before hiring an accountant, make sure you find one who specialises in tax deductions for yoga teachers.

Whilst hiring an accountant who can help you with your tax returns, one who manages finances in your industry will have a better understanding of the typical charges and expenses.

They will also be able to identify challenges you may face within your profession and offer potential solutions.

An example of this can be found with The Orenda Collective, which provides accountancy services for Pilates and Yoga Instructors: 

You could make sure the accountant you’re looking to hire is registered as a chartered accountant. This is evidence that they have the relevant qualifications and experience to assist you.

The Institute of Chartered Accountants is a great website to get confirmation of an accountant’s credentials.

We searched for The Orenda Collective on their search engine and found they have two members of staff registered as chartered accountants.

After you have confirmed your accountant has chartered status, you’ll need to make sure they provide the services you require. 

The Orenda Collective, for example, will be able to complete your tax returns, along with guidance on tax-deductible expenses.

Alongside these services, the company also provides additional services including advice on pricing classes and studio sessions, as well as improving business strategies. 

Make sure you’re securing the services of an accountant that is within your budget. Companies like Fixed Fee Tax Returns offer tax returns from £135. 

This will prevent you from going over budget and reducing your final profits when you submit your tax return form.

If you’re concerned, contact potential accountants to get a breakdown of fees, services and support you will receive. This will help you hire the right accountant based on your budget and the support you require.

Once You’ve Hired An Accountant, You Will Need To Provide Evidence Of Yoga Teacher Expenses

Once you have chosen an accountant, you will need to make sure they have all the information they require from you. 

To help break down what an accountant might require from you, they may ask for: 

• Invoices
• Bank Statements
• Income records
• Equipment purchased
• Travel receipts 

By keeping a record of all outgoings related to your business you will be able to help your accountant submit your self-assessment tax returns accurately and on schedule.

What Can I Do If I Don’t Want To Hire An Accountant For My Yoga Teacher Expenses?

We would always encourage you to seek the assistance of a professional accountant when it comes to completing your tax returns.

However, if you feel confident you can complete a tax return on time and correctly, there is a tool that can help you.

You can download the HMRC self-assessment app from your Android or iOS device.

If you click on the HMRC website, they will provide you with a breakdown of what you can use the app for: 

This will be a useful app to download as it will help you correctly submit your earnings, along with evidence of your incomings and outgoings.

Some errors can occur from inexperience with returning taxes, such as: 

• Declaring an incorrect salary
• Claiming expenses not related to your business
• Missing deadlines

Don’t pursue this option as a simple, cost-saving measure because if you make a mistake, you will likely be penalised for it.

Now that you have learnt what’s expected of you when completing a self-assessment tax return, and the support you can receive, let’s take a look at some of the yoga teacher expenses that can be deducted from your tax bill.

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Full List of Yoga Teacher Allowable Expenses

If you want to understand what yoga instructor tax deductions you can claim, it’s important to understand what expenses qualify as ‘wholly and exclusive’.

You will become increasingly familiar with this term, which the HRMC defines as an expense that self-employed people use:

‘for the purposes of their trade, profession or vocation. If you identify a non-trade purpose then the expenditure is not allowable.’

Put simply, if you’re claiming an expense, it needs to be for your business alone. You may have a lot of expenses to keep your business operational.

To help break down these expenses, let’s explore some key categories that may apply to areas of your business. It will help you to begin to understand what costs are wholly and exclusively related to your business.

On the HMRC website, they provide self-employed people with areas they might be able to claim expenses for, these include: 

• office costs
• travel costs
• clothing expenses
• staff costs
• things you buy to sell on
• financial costs
• costs of your business premises
• advertising or marketing
• training courses

Below, we have given you examples of how these categories might apply to you as a yoga teacher who runs their own business.

Office Equipment Expenses You Might Incur As A Yoga Teacher

When you’re working out yoga instructor tax deductions for your business, one of the first areas you might review for costs is the ones from your office or workspace.

These costs may come from:

• Office equipment you purchased, such as a laptop and stationery. These can be included as expenses in your final tax bill.
• Using the best yoga studio software that helps you manage your schedules, complete administrative tasks and manage your accounts. This can only be claimed if the useful life of the software lasts no longer than two years. 

Claiming Yoga Teacher Expenses Is A Little Bit Trickier For Travel Costs

Travel can be claimed as one of your yoga instructor tax deductions, however, you need to make sure you’re submitting the claim for the correct expenses. For example:

• You can claim your car’s insurance, its repairs and petrol to help you travel between your place of business, along with any hire and parking charges.
• If you’re not travelling by car, you can claim any expenses for any public transport you use to get to work.
• However, if you’re able to travel to temporary places of business, then you can claim this as an allowable expense.
• It is important to remember that you can’t claim travel expenses if you have one place of business to travel to.
• Don’t forget you can’t include costs from a normal commute in your yoga teacher expenses claim.

If You Wear A Uniform You Might Be Able To Claim Yoga Trainer Expenses

Expenses for a yoga teacher can include a uniform but be careful, as this area of your expense claims can be tricky:

• If the uniform you wear is specifically for the classes you conduct and helps you carry them out in comfort, then you can claim them as an expense.
• Your expense claims will also stand a better chance of being deducted from your final tax bill if your uniform carries your business logo and you wear the uniform frequently.
• It is important to remember that you can’t claim any uniform expenses if you use clothing as everyday wear in a work setting.

You Can Claim Staff Yoga Teacher Expenses If You Operate a Larger Company

Yoga instructor tax deductions can also extend to your staff expenditures if you have a team that helps your business operations.

• This will predominantly come from your outgoings for staff salaries, pensions and issuing bonuses from their performances.
• If you are worried about how much yoga teacher training costs, then the good news is that yoga teacher training is tax deductible, along with any other training you provide to additional staff to help improve the quality of work they produce. 
• Earlier, we mentioned hiring an accountant to help you submit your tax return. This would be another staff expense you can claim for.

It is important to note that you can’t claim any expenses for a yoga teacher if you paid for any assistance in your personal life, which could include carers or domestic help. 

Yoga Instructor Tax Deductions Can Include Additional Charges

You can claim yoga instructor tax deductions for other financial obligations you might have. These can come in the fees you have to pay out to: 

Legal

• You can claim expenses when you use solicitors to seek legal advice or surveyors when you’re having your place of business checked for damages or renovations you’re considering.
• You can claim insurance you have purchased to cover any claims against you whilst you’re working. 
• You can’t claim legal fees from securing premises or fitness equipment that came with affiliated costs.
• You can’t claim expenses for any fines, such as those associated with failing health and safety checks or GDPR violations. 

Bank Charges

• You can also claim expenses for any charges you accrue from bank charges and interests from your business loans.
• You can’t claim for any loan, overdraft and finance arrangements.

You Can Claim Yoga Teacher Expenses For Any Yoga Products You Purchase and Sell

Another expense you can claim tax deductions on is the purchasing and selling of goods. This can come from:

• Selling the best yoga kits such as yoga mats, slings, blankets and any products featuring your company name.

You must record how much you purchased these items for and the quantities and prices you sold them to customers for. This will be useful when filling out your tax returns at the end of the year.

Yoga Teacher Tax Deductions Can Include Your Business Premises

If you own a building for your business, you will be able to claim these as expenses in your final tax bill. This will apply: 

• If you have premises that you use solely for your yoga classes, you will have bills and rent obligations to keep your business operational. These will be eligible for a tax expense claim.
• You will also have monthly broadband, gas and electricity bills. These can be claimed as expenses as they are wholly and exclusively for your business.
• You can’t claim any expenses if the property is used for any activities that are not directly to your business.

You Can Also Claim Yoga Teacher Expenses For Marketing Costs

Any marketing costs you incur will also be considered yoga tax deductible. This is because you’re generating promotional materials to help generate further revenue for your business. This includes:

• Purchasing ad space through social media and Google help inform consumers of your business and the latest offers.
• You can also claim tax expenses for any reading materials such as books and journals if they have a direct benefit and relationship to your business. 
• You can’t use this as an opportunity to claim membership fees as yoga tax deductible. These membership fees are for recreational purposes rather than maintaining the function of your business.

Before You Go!

After reading this article, you will have a better understanding of the tax deductions you will be eligible to claim and the deadlines you’ll need to be aware of to avoid penalties.

If you’re interested in elevating your yoga teaching, OriGym’s specialist Level 4 yoga qualifications offer the opportunity to develop a lucrative specialism and build a prosperous yoga business.

Further information about this course and all our other qualifications can be found by downloading OriGym’s free course prospectus here.