Most business expenses are allowable so you can claim them to reduce your tax bill. The expenses your business has might vary depending on the nature of the business. Though this is by no means an exhaustive list, it gives an overview of the most common types of expenses.
Claiming for vehicle expenses
The way that you claim expenses for vehicles in your business depends on what sort of structure your business operates as. There rules for sole traders and partnerships are different to those in place for limited companies.
Vehicle expenses for sole traders and partnerships
If you use a vehicle for work you can claim all costs relating to that vehicle. This includes insurance, road tax, fuel, vehicle lease/hire, vehicle wash and repairs.
As an alternative, you can record your business mileage and claim a set amount for each mile you travel. If you also use the vehicle for personal reasons, then you’ll need to be careful that you only claim for business journeys.
Vehicle expenses for limited companies
If the company has a commercial vehicle you can claim all costs of that vehicle including insurance, road tax, fuel, vehicle lease/ hire, vehicle wash and repairs. Alternatively business mileage can be recorded and you can claim a set amount per mile travelled.
If your vehicle is a car and used for personal and business use then it is normally better to own the vehicle personally and record the business mileage that you travel which will be charged to the company accordingly. By operating in this way you avoid a benefit in kind situation occurring which would result in personal tax being owed to HMRC.
What other allowable expenses can my business claim for?
The expenses that you can claim and offset against your tax don’t just stop at vehicles. Read our list of other types of allowable expense.
When paying for a vehicle or equipment on hire purchase you are able to claim the interest payable as an expense. Most people will leave this to their accountant to calculate.
Goods and materials
Goods or materials purchased by a business to sell or use are claimable.
This is for general repairs for your business and small renewals that would not be classed as capital expenditure.
Wages are the amounts that you have paid staff through PAYE. And yes, they’re an allowable expense!
These include business bank charges you may have incurred. If you are a sole trader and have a personal bank account you will be able to claim a proportion of these charges.
Telephone and internet costs
Landline, mobile phone and broadband provider costs. If you are a sole trader then you will be required to proportion your business and personal usage of your telephone and internet costs.
Postage and stationery
Business postage and stationery can be claimed as a business expense.
This is allowable whether it is advertising in a magazine, on a website or leaflet distribution.
Trade associations, membership bodies or networking fees.
You can only claim expenses for work clothing that is protective (such as safety boots) or some sort of uniform. As a general rule, if you would wear the clothing outside of work then it is not claimable. Our article explains work clothes expenses in more detail.
Training costs, CPD and study courses can be claimed for. However, you cannot usually claim for training costs in order to qualify for your profession.
If you work away from home occasionally then you can claim for your food etc. The rules around claiming subsistence can be quite complex so it would be worth asking your accountant for further clarification around this if you are unsure.
Accountancy fees, solicitors fees etc.
Payments made for liability insurance/professional indemnity insurance and most other types of business insurance are claimable.
Sundry expenses are small business expenses you may incur.
Larger items, such as a new vehicle or computer, are normally classed as capital expenditure. These items are considered assets which stay in your business and help it to operate. Their value will depreciate over time, and you can claim capital allowances for this accordingly.
If you incurred expenses before you started trading then you can include these expenses. If you introduce personal assets into the business, such as tools or a computer, these are dealt with at their market value on the date they were introduced. You can usually estimate the value yourself, as long as it’s fair for the market and could realistically be sold at that price.
For further information about what business expenses you can claim, we have a video guide that can be found here. For help with your accounting needs, talk to one of our advisors on 020 3355 4047, or use the live chat button on your screen.
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Forensics graduate-turned copywriter and blogger. I love turning complex topics into easy to understand, yet engaging pieces of content.