Although all businesses are different, it is important not to overlook any expenses for which the deduction could be claimed. The rules on what you can claim or not are bit complicated, especially if you want to claim money for gas and motoring expenses, or for the use of your home as office.
Important: the following information should only be used as a rough guide to categorizing expenses. You should always get professional accounting advice if you're in any questions or doubts.
Making a list of possible expenses can help you in your expense management efforts.
- Accountancy fees. You can claim accountancy fees for the professional time that is being spent on your accounts.
- Advertising. The cost of promoting your business id deductible. This includes leaflets, logos, advertising gifts, networking club, website development.
- Accommodation whilst on travel. You can claim full amount as long as the trip was for business purposes (reasonable and not excessive expense).
- Bad debts, a deduction can be made for a bad or doubtful debt in the year which the debt becomes bad or doubtful.
- Bank charges can be deductible expense only if they relate to company/sole trader bank account.
- Books and Journal, like trade magazines, periodicals and books relevant to the business are allowable.
- Business mileage/Motor expenses. If there is any use of your personal vehicle, then you can claim business mileage. Whilst you claim mileage, you cannot claim any other motor expenses. Ensure that you keep log for the mileage with accurate dates and destinations.
Planes, trains and ferries can also be covered under business mileage.
Tolls, congestion charges and parking fees are all allowable expenses.
Parking fines are no allowable expense.
Rate Per Mile (On first 10,000 miles in tax year)
Rate Per Mile (On each mile over 10,000 miles)
Car & Van
- Charitable donations. You can receive tax relief only if the charity is registered and is for business purposes.
- Childcare vouchers. You may be able to supply each employee with up to £243 per month in childcare vouchers, providing the employee meets certain conditions.
- Christmas party / Events. You must not exceed expenditure of £150/person (including VAT). The event must cater mainly for staff.
- Company formation fees. This includes all the relevant expenses. Any accountancy fees or mandatory formations costs (Companies House) you paid can also be claimed.
- Entertainment for customers is not allowable expense and must be added back to company’s profits in order to calculate tax. Entertainment for employees includes Provision of accommodation, Theatre and concert tickets, Sporting events and facilities, Entrance to clubs and nightclubs.
- Equipment. This covers computers, printers and software.
- Eyesight test & glasses, you can claim once per year. Glasses you can claim only if you need them during your working hours (if you work in front of a pc).
- Gifts to employees may be treated as benefits in kind. Gifts to someone outside the company can be claimed up to 350 (as long it is not food, alcohol or tobacco).
- Legal and Professional Fees, incurred solely for business purposes can be claimed.
- Medical insurance, unless it is part of employee’s one free check a year, it will be regarded as a benefit in kind and your company will be liable to NIC.
- Office supplies, such as stationery, paper clips and ink cartridges
- Pension, can be claim 100% as long as the company has set up a contract with a pension provider.
- Packaging & delivery costs, especially if your business involves package delivery (such as e-shop).
- Power & Water
- Professional subscriptions, the whole cost can be deducted. When the cost is paid by a company, then they are deductible in computing the profits. The employ will not suffer a benefit in kind tax charge, as long as they are on HMRC’s list.
- Rent for business premises is allowable expense.
- Salaries / Staff costs, all of them can be deducted. Usually payroll indicates the largest expense within a company.
- Postage for communicating can be deducted.
- Telephones & internet charges. You can claim 100% if they are in company’s name. A proportion could be claim if these bills are in your name.
- The use of your home as an office, you are entitled to £4 a week cover without having to report it on your P11D. You can claim more (fixed rate) under certain circumstances.
- Travel & subsistence (not between work and home). It is an allowable expense if you are travelling to a temporary workplace. Meals, tolls, congestion charges and parking fees can all be claimed for under travel and subsistence.
- Training costs, but be careful as there is a distinction between training to update existing skills and training to acquire new skill.
This document contains guidance only and is not a substitute for tailored advice from an Accountax Mentors accountant. Contact us for advice pertaining to your specific business and situation.
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