There’s an increasing number of online accountancy firms that are super easy and convenient to use – but might lack that personal touch the older generation came to expect from the person overseeing company finances. Meetings with accountants used to be full and frank conversations about what can be legitimately claimed as expenses – although now your accountant’s expense advice might only extend to a quick glance over a spreadsheet.
It pays to be well informed when it comes to what can be claimed as expense and what can’t. While it’s no substitute for professional advice we can run you through a list of things you’ll want to make sure you keep you receipts for so you can dig into a bit more detail with your accountant later:
The more established your business becomes the more you’ll incur in business banking charges. Keep a track of monthly or quarterly charges and make sure they’re on your expenses list.
If your business requires specialist clothing for any role then this can be claimed for – as can equipment like boots, gloves, masks, helmets and so forth.
Living and working away from home?
If you’re living away from home because of work then you can claim for ‘subsistence’ – this means any accommodation and general living costs should be kept track of carefully as they can quickly add up. There’s a limit of 24 months – beyond which your temporary workplace is no longer considered temporary…
Travelling for work?
In a similar vein to living away from home – temporary accommodation when you’re on a long-distance visit can also be claimed. You can claim ‘incidental’ expenses of £5 if you’re away in the UK – and £10 if you’re away overseas.
Any travel tickets – whether that’s for planes, trains, taxis or boats can also be claimed, as can travel to and from business engagements – no sneaking in pleasure-boat or sightseeing tickets though.
Don’t forget to keep tabs on your driving miles too – you can claim 45p for every mile you do up to 10,000 – with miles beyond that dropping to 25p. Not a driver? No problem, bicycles experience wear and tear too – you can claim 20p per mile if you pedal your business miles.
Claiming against computer equipment can be tricky – you have to ensure that you’re claiming for something that is used exclusively for work purposes, so if that iPad doubles up as the family music centre or feeds your CandyCrush addiction then you’ll need to scratch it from the list… You may also be able to claim back expenses for things such as web hosting for your business website, for more information on web hosting check out this great guide to wordpress web hosting.
If you’re going on a training course that’s relevant to your work then this is also a legitimate expense. If it’s not immediately obvious why you might require the course – jot a quick note of why it’s crucial for the business and it’ll save you trying to justify it further down the line.
As long as your phone, internet and mobile packages are registered in the company name then they can be claimed. Are you working from a home office with a shared line? Take a while to look through an itemised bill and pick out what are your business calls – they’ll have a cost attributed to them which can be claimed.
Working from home?
If you’re home based then there’s a varying amount that can be claimed. Let’s say you have 6 rooms and 1 of those is used entirely for work – you’ll be able to claim 1/6th of the cost of heating and providing electric for business use. Even if you don’t keep tabs on this use (it can be difficult to accurately work out) – HMRC allow you to claim £4 a week without receipts or statements.
There are some obvious ones here – your accountant, solicitor and so forth – but don’t forget that any work done on your premises, specialist marketing, outsourced services can also fall into the professional services category.
A little like mobile phone and utility contracts, finance contracts can be claimed – but only if they’re in the company name.
Do you need public liability insurance? Insurances that relate to employee health and safety? Or something more specialised? These are all business expenses that you can’t safely trade without.
Stationary and printing
Any stationary that you buy to support your role is an expense – as is any printing you do. Don’t worry, this doesn’t just extend to the company printer, anything that you’re outsourcing or ordering online falls into the printing category.
Depreciation of company assets
This is a complex area with specialist calculations to be made. Essentially any asset held is likely to lose value as it ages – and this depreciation can be offset against tax. Your accountant is likely to be on top of this one – you just need to make sure you’ve got a comprehensive list of assets held.
Professional magazines, journals and subscriptions
If they relate to your work then subscribing to often costly professional publications is very much a business expense.
If your employees use screens as part of their role then you can claim an annual eye-test as an expense.
Employee general health
Although we have a national health service there’s an allowance made for any company who wishes for their employees to have a private medical health check.
If you’ve got a festive celebration planned then there’s an allowance of £150 per attendee that can be claimed, including partners and spouses – which might be some solace if the company credit card ends up behind the bar…
What can’t be claimed?
It’s important to remember HMRC’s guidelines when it comes to looking at your expenses – they clearly state that expenses should be “wholly, exclusively and necessary” for your business purposes. It’s important that you’re watertight on this requirement – when it comes to tax, a ‘little white lie’ is generally referred to as ‘fraud’ by HMRC.
Because we’re dealing with such a complex and professional area it’s important to note that everything here is intended as a ‘rough guide’ to expand people’s awareness as to what can be viewed as a company expense. You absolutely must seek the professional advice of a qualified accountant with experience in your field to ensure you’re maximising your expenses while staying on the right side of HMRC.