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Not all expenses that go through your business are allowed to be deducted against your tax bill. It’s important to understand what’s classed as a tax deductible expense and what isn’t. If you claim incorrectly this could result in fines and penalties later down the line. It could also mean that you’re missing out on claiming vital expenses.
So, what are you allowed to claim for?
Office expenses
Equipment which you are going to use for less than 2 years is classed as a tax deductible expense. Anything which has a longer life span would need to be treated differently, so reach out to your bookkeeper to clarify this.
The following bills are classed as allowable expenses;
– Wifi
– Phone
– Stationery
– Postage
– Printing
– Software
– Rent
– Business rates
– Utility bills
– Insurance
– Security
Mileage and travel
If you have a genuine reason to travel for business then you can claim back the cost for a taxi, plane, train, bus etc. Make sure you keep all your receipts safe.
If you use your own car for business purposes other than commuting then you can claim 45p per mile for the first 10,000 miles and 25p per mile thereafter. Be sure to keep a record of all the journeys you make and the reason why just in case you’re ever investigated. You’ll need to clarify where you went and why. The mileage rule also applies for motorbikes.
Uniform
If you need to wear a uniform for work then this is an allowable expense but it must fall under the following criteria;
– Be branded with your logo
– Protective clothing
– Costume
– Business uniform
You cannot claim for work clothes just because you wear them for work, even if you don’t wear them for personal use. A business uniform must be branded, or be specific to your line of work.
Promotional material
Anything which you use that contains your logo that promotes your business is tax deductible. Things such as letterheads, branded pens, branded clothing, business cards, leaflets etc.
If you choose to advertise in a local newspaper or use facebook ads for example then this is also classed as a tax deductible advertising expense.
Bookkeeping
We have great news! If you hire a bookkeeper not only do you get clarity on your finances and become more in control but our fees are a tax allowable expense. Other professional fees such as legal costs, insurance etc are also allowable.
Speeding and parking fines are not included!
There are other costs which your business may incur which could well be classed as tax deductible. Items which you purchase in order to sell on, or to create your products fall under this criteria. It’s always best to speak to a bookkeeper to clarify that everything you are claiming for is legitimate and above board.
