Allowable Expenses and You.
If you run a business you can claim for expenses on some of the costs. Everyone knows that. But ask them exactly what expenses can be claimed and when, and things get a little bit vague. At Artisan Accounts, we are big believers in incremental savings that help your business and claiming your expenses correctly is one of them. So, what exactly can you claim on expenses? Well, it’s a long list but there are some big-ticket items that stand out.
Cars, Motorcycles and um, Skateboards? – Threes always sound better, but sadly you probably can’t claim for use of your skateboard. You can, however, claim mileage on a car you use for business – 45 p for your first 10,000 miles and then 25p for each one after. Which can add up to quite a lot. Motorcycle users can claim 24p a mile to infinity and beyond! But Stop! Wait! There is a third one! Did you know you can claim 20p a mile for bike travel? No? Well you can, time to trade in that skateboard! You can also make claims related to travel for business, such as accommodation and subsistence costs and company car expenses (that’s another blog though).
Office Supplies. Doesn’t have quite the same ring to it, but yes, you can claim for office supplies, such as stationery and consumables like printer ink (a big cost for many of our clients) that are essential to the running of your company. You can also claim back for some business magazines and books. Larger items of equipment, such as laptops, are treated as assets – you can also claim the cost but the process and rules are a bit different – these are known as capital allowances.
But where do you keep all that equipment? If you work from home, you can also claim on your rent or mortgage and even household bills. This is limited though by the amount of space you use in your home and whether it is fully given over to your business or not. If you have a dedicated space, you can claim that proportion of your household costs, if the space is also used privately, you can only claim for the % of time it used for the business. Bills can be calculated in a similar way to work out the amount you can claim back and can cover broadband, mobiles and utilities.
Tip: ask us for our easy-to-use home office costs worksheet and rental agreement.
If you employ anyone in your business, you can claim for salaries, pension contributions, NIC’s, training courses, annual health checks and eye tests for employees and £150 per employee for company parties!
The running of your business is also an area where you can claim expenses, items such as your company formation and ongoing costs, business insurance, bank charges, professional fees you may need, such as an accountant (just saying) and lawyers, subscriptions (there are some restrictions) and the costs of advertising and marketing your business.
Another area to think about is capital allowances or the depreciation of assets. This is a little bit more complicated and we’ll dedicate another blog to it shortly.
Finally, let’s all be nice to each other. If you give a gift worth up to £50 to anyone who is not an employee of your company and as long as it is not food, drink, tobacco or vouchers and providing it is prominently marked with the company’s name, then you can claim tax relief on it too.
To learn more, you can access a full list of allowable expenses at the HMRC website