What expenses can I claim?
Limited company expenses are allowable expenses that your business can deduct from it’s income, thereby helping you to reduce your Corporation Tax bill.
What Can I claim for?
HMRC states you can claim for things such as;
In setting up and running your limited company, you will have incurred costs. Many of these are allowable business expenses, such as;
- the costs of forming your limited company.
- Costs associated with premises, such as rent and utility bills.
- The costs of employing people, i.e. salaries and staff costs.
- the cost of purchasing stock and raw materials used for production in your business.
- Costs associated with running your office, such as stationary, postage and phone bills.
- Professional and legal fees such as accountancy fees and business insurance.
- Costs associated with selling your products\services such as advertising and marketing.
- Travel and accommodation costs relating to business trips.
Entertainment costs are not usually allowable expenses, whether that is entertaining customers or suppliers. The only entertainment expense that is allowable is;
- if you are hosting a social event (for example a Christmas party),
- it is an annual event,
- it is open to all staff
- the costs do not exceed £150 per person.
What about Capital Allowances?
It’s a different story when buying assets for your business. If you purchase what HMRC refer to as plant and machinery for use in your business or a work van, you can claim Capital Allowances on your Company Tax return.
This allows you to deduct the full cost of the asset from your revenue before tax, using your Annual Investment Allowance (AIA).
What about Employee expenses?
If you employees incur expenses during the course of the work (wholly in relation to your work), ask them to submit an expense claim including the receipts so that you can reimburse them. These expenses can be included when calculating your allowable expenses
Commuting costs are not allowable, however if they travel for business, for example to a conference or to visit a client or supplier – these will be allowable.
If the company pays for things for it’s employees such as gym membership, travel or health insurance – these will need to be declared to HMRC and pay and National Insurance will need to be paid on these.
At Nazman Accountants
Call us on (01274) 736000 to discuss how we can help you correctly identify your Allowable Expenses and make sure you minimise your Corporation Tax bill.