5 COMMONLY OVERLOOKED BUSINESS EXPENSES
As a small business owner, you’ve probably wondered “what can I claim as a business expense?”.
There are often misconceptions and misunderstandings about business expenses and it can get confusing what does and doesn't attract corporation tax relief through your limited company.
There are small business deductions that frequently get missed, forgotten or even that seasoned business owners aren’t aware of.
Read on for our top five commonly forgotten business tax deductible expenses:
DISCLAIMER: This blog is for general information only. Always take professional advice tailored to your own circumstances. Rates and allowances are for the 23/24 tax year which were in place at time of writing and might have changed by the time you are reading this blog post.
STAFF EVENTS
Want to treat your staff to a nice social event to show your team you appreciate them?
During the tax year, you can spend up to £150 per employee for an annual event such as a Christmas or Summer party.
If it meets this criteria, it is also not a taxable benefit for your employees. But beware: it’s not an allowance so if you spend a penny over, the whole amount becomes a taxable benefit.
BRANDED GIFTS
Business gifting is not generally tax-deductible.
However, if you provide a client/supplier/business associates with a gift that:
has obvious branding such as a logo
costs less than £50 (in total to any one recipient per tax year)
is not food, drink, a voucher or tobacco
then it can be claimed as an allowable Advertising & Marketing expense.
If it does not meet this criteria, it is business entertaining which is not corporation tax deductible
CHARITABLE DONATIONS
You can get tax relief for a donation to a registered national charity made through your limited company, as long it doesn’t create a loss for your company.
TIP: Remember to keep supporting documentation!
MILEAGE
You may already know that if you use your own private vehicle for a business journey you can claim back 45p/mile from your company. Yes, it can be a faff to log mileage but there are software options to make it painless and those car journeys add up to a lot over a year!
Driving with a co-founder, co-director or employee to an event? You can actually claim an additional 5p/a mile on top if you have a passenger. Don’t forget that you can also claim 20p/mile for business travel using your own bicycle.
(Mileage rates applicable for 23/24 tax year).
USE OF HOME AS AN OFFICE
Don’t have an office and regularly using your kitchen table or spare room as your workplace?
If you’re a director of a limited company, your company can reimburse you HMRC’s published rate of up to £6/week or £312/year for additional household costs (for the 23/24 tax year).
You can also reimburse this rate to employees who have formal home working arrangements.
Did you know we offer our clients an Accountancy Healthcheck in all our packages so that you’re not missing out on tax relief or getting an unexpected tax bill for expenses you shouldn’t have put through? If you’re interested in finding out more then please get in touch to book a free discovery call.
