Running it
Commission is a cost, not an invisible discount
Money deducted before it reaches you was still earned by you, and forgetting that understates your costs.
Guides on Running it: The admin that turns income into a trade
The largest cost in this trade is the one you never see leave, because it was taken before the money arrived. Earners who build their records from what landed in the bank routinely omit the biggest deduction they have, and the omission works against them.
None of this is advice for your jurisdiction, and what is deductible differs by country. The categories, and the reasoning about mixed use, generalise.
The deduction you never see
A buyer pays a hundred. Commission and processing take a share, and seventy-something arrives.
In most systems that is not what happened: your turnover was the hundred and the difference was a cost of earning it.
Recording it the lazy way loses you the cost. It also loses you the ability to answer the only question that matters when comparing platforms, which is what you actually keep - and the answer differs by several percent between platforms with identical advertised cuts, as how platform fees change your effective rate sets out in full.
The same logic applies to every other deduction taken at source.
| Deduction | Usual position |
|---|---|
| Platform commission | A cost of earning, taken before payment |
| Payment processing charge | A cost, sometimes separate from commission, sometimes buried in it |
| Payout or withdrawal charge | A cost, charged when you move money out |
| Currency conversion spread | A cost, and frequently invisible because it is priced into the rate |
| Chargeback or dispute fee | A cost, and usually not refunded when the payment is |
The conversion spread is the one people miss entirely, because no line item appears anywhere. The way to find it is to compare the amount that left against the amount that arrived, on the day, and record the difference.
Which fees a given platform charges and how it presents them is a platform question rather than a general one, and Rate Cock's rewards and payouts page is the place to read its own schedule rather than a generic list.
The costs you pay for directly
These are the ordinary ones, and the test in most systems is whether the cost was incurred for the purpose of the work.
Equipment: a microphone, a webcam, lighting, a device used for the work. Software and subscriptions: editing tools, storage, a scheduling or invoicing tool, a password manager. Connectivity and phone, to the extent it is used for the work. Workspace costs, where a share of a home is used for it. Professional fees, including an accountant. Bank charges on an account used for the trade.
The category people over-claim is equipment, and the reason is that the shopping is more enjoyable than the work. A microphone is the one purchase that reliably changes what you can charge on recorded formats, and almost nothing else does until you are booked out - equipment that is actually required is the short list. The gear question as a subject of its own, and what different setups actually change, belongs to Measure My Cock's gear material.
The category people under-claim is subscriptions, because they are small, monthly and forgettable. Twelve small monthly charges are not a small annual figure, and the receipts for them exist only in an inbox.
Mixed use is the whole problem
Almost nothing in a one-person trade is used exclusively for it. The laptop, the phone, the internet connection and the room are all shared with your ordinary life, and claiming the whole of something you half-use is the most common careless error in a first return.
The general principle across systems is apportionment: claim the share attributable to the work, on a basis you can explain. HMRC's own example is a £200 phone bill of which only the £70 spent on business calls can be claimed.
A basis you can explain is the operative phrase. It does not need to be precise to the pound; it needs to be a method a reasonable person would recognise, applied consistently, and written down at the time rather than reconstructed later.
Hours of use, floor area, a documented sample fortnight: all are recognisable methods. "Roughly half" with nothing behind it is not, and it is the answer that invites a question. Mixed-use equipment and apportionment works through how to pick and record a basis.
Two things sit outside this. Some systems spread larger equipment over years rather than allowing it in one, and some treat a workspace under a simplified flat allowance that is smaller and far less trouble than a calculated share. Which applies is a country question, and one conversation with an accountant settles it permanently - when to get an accountant makes the case that the conversation is cheaper than the mistake.
What is generally not a cost
Three that people try, and that mostly do not survive contact with a rule.
Your own time. Unpaid hours are not a deductible cost in a sole trader arrangement; they are simply hours that did not earn.
Ordinary clothing, food and the room you would have heated anyway. The test is whether the cost exists because of the work, and most of everyday life fails it.
Money withdrawn from the trade for yourself. Taking money out of the business is not an expense of the business, and treating it as one is the error that makes a set of records unusable - paying yourself from the business is the piece on that distinction.
Recording it so the year is an hour
Log costs where you log jobs, in the same file, with a date, an amount, a category and a one-line note saying what it was for. Keep the receipt as a file rather than as an email you intend to find - keeping receipts that count covers what a usable receipt contains.
The reason to categorise as you go, rather than sorting it in one sitting at the end, is that categorisation is the part requiring memory, and memory is the thing that will not be there.
There is a second payoff that has nothing to do with a deadline. Once costs are recorded per job alongside gross, you can compute take-home per format, and after thirty jobs that table tells you which format to stop offering - which is the argument in tracking take-home per format. That is usually worth more than the tax the records were kept for.
It also shows where a subscription is buying nothing. Tooling that automates the routine end of assessment is genuinely useful and genuinely priced, and Penis Rater's tools material describes what that category typically covers; the test for keeping a subscription is whether it changed your minutes per job or your price, and the honest answer is available in your own records. The same test applies to anything sold on the promise of better accuracy, which is a claim with a real literature behind it rather than a marketing line - Ai Penis's accuracy material is where that subject is covered properly. A cost that changed neither number is a habit, not a cost of earning.