Essential Expenses Your Limited Company Can Claim

Let's talk about what expenses you as a Director of your Limited Company, can claim.

Running a limited company comes with various expenses. However, understanding which costs you can claim is crucial for effective financial management. Knowing these can help reduce your taxable income and maximize your profits.

As a Director, you cannot claim personal expenses for your business on your Income Tax Self Assessment (ITSA). Instead, these are reclaimable and payable by your business.

So, let GWBS help you make sure you have all your expenses covered, which will help reduce your Corporation Tax bill.

Here are some of the things you can claim...

Office Supplies and Equipment

One of the most common expenses you can claim is office supplies. This includes items like pens, paper, and printer ink. You can also claim costs for office equipment such as computers, printers, and software.

Ensure you keep all receipts and invoices for these purchases. Proper documentation is essential for accurate bookkeeping and tax filing.

Travel using your personal car. However, the travel must be for business purposes only.

It's important to keep detailed records of your travel, including dates, destinations, and reasons for the trip. This will help you justify these expenses if questioned by tax authorities. We can help you with mileage claim forms which can claim you up to 45p per mile. You can also claim for parking, tolls, congestion charges, subsistence, accommodation and public transport.

Utilities and Rent

If you rent an office space, you can claim the rent as a business expense. Additionally, you can claim utility costs such as electricity, water, and internet. If you work from home, you can claim a portion of your home utility costs.

To claim home office expenses, calculate the percentage of your home used for business. Apply this percentage to your utility bills to determine the claimable amount.

Subscriptions

You can claim the cost of subscriptions to professional journals and memberships in professional organizations. These resources help you stay updated in your field and improve your business operations.

Marketing and Advertising

Marketing and advertising expenses are crucial for business growth. You can claim costs for online ads, print materials, and even promotional events. These expenses help attract new clients and retain existing ones.

Ensure you keep records of all marketing activities and their costs. This will help you track the effectiveness of your marketing strategies and justify these expenses during tax filing.

Insurance

Having the right insurance coverage is crucial for mitigating risks and ensuring business continuity. Keep all insurance documents and payment receipts for accurate bookkeeping.

Training and Development

Investing in training and development for yourself and your employees is beneficial for business growth. You can claim costs for courses, workshops, and certifications that enhance your skills and knowledge.

These expenses not only improve your business operations but also contribute to long-term success. Keep records of all training activities and their costs for accurate expense claims.

Other things you can claim...

Bank charges - such as bank fees, transaction fees and loan interest.

Phone bills - If your mobile phone contract is in your business name, you can claim the entire bill as an expense. If you make calls from a home phone line, you can also claim for these - keep records!

Professional fees - Such as your accountant, consultant, solicitor or other legal fees.

Entertainment - Business entertainment is not an allowable expense against profits. However, if you were to put on a staff party, this is reclaimable up to £150 per head.

Health checks and eye test costs.

Start up costs for up to 7 years before trading. You must keep accurate records.

Pension contributions - there is a £40,000 limit to what you pay in tax-free.

The Rules

You can only claim for the costs you incur wholly and exclusively for setting up and running your business.

You can't claim for expenses that have a dual purpose for buisness and personal use. E.g. extending a work trip for some personal time - you can only claim for the business days.

Business expenses can be paid for from your business account, or reclaimed from the business if using your personal account.

Keep accurate records! This is imperative if you were to receive queries or an investigation from HMRC in the future.

We hope this article gives you some insight. We are happy to check your accounts and make sure you are claiming all you can. Contact us now!