Trying to get your books sorted, and wondering what expenses you can claim for on your tax return? It can be a bit of a minefield, so we asked Choice Bookkeeping for some advice!
If you keep in mind as a general guide that the expense must be “wholly and exclusively” for business purposes, you can’t go too far wrong. Here are a few things that you can and can’t claim for!
Yes, you can claim for travel if it is needed as part of your business. For cars and vans, you can claim 45p per mile, up to 10,000 miles. The rate reduces to 25p after this. You can also claim for taxi fares, buses and trains. You can claim for flights if they are for work purposes, eg going to a conference or seminar – a 2 week holiday for the family in Spain won’t count though! HMRC will also allow you to claim for parking costs, but won’t allow you to claim for trips to and from work from your home, or fines for parking or speeding, even if you got them while working.
This is often a big cost for businesses. You can claim for these in your tax return:
- Your work phone/mobile
- Postage costs
- Business stationery – pens, notepads etc
- Printing costs
- Printer ink and cartridges
- Computer software
For some bigger items like computers and expensive software, you may find you need to claim these expenses as capital allowances. It is best to speak to your bookkeeper about how best to claim for larger purchases.
These are definitely something you can claim for! Don’t forget to claim for advertising (both on and offline), website costs, any directories you are part of, and attending networking meetings. Your golf course membership doesn’t count unfortunately, even if you do some great networking on the course!
Are their certain items of clothing that you must use or wear for work? You can potentially claim for these! You can’t claim for everyday outfits you wear to work, and definitely not the entire contents of your wardrobe as an allowable expense, but protective clothing eg steel capped boots, or branded work uniforms can be claimed for. As a general rule, they’ve got to be necessary, work-specific clothing items to qualify as a business expense, so it unlikely that you can claim for those Jimmy Choos!
Another big one for many businesses. Don’t forget to claim for:
- Employee salaries and bonuses
- Pension contributions and Employer’s National Insurance
- Agency fees
- Subcontractors fees
As always, there are exceptions – you can’t claim for a nanny or childminder, even if you need one to be able to work.
Legal and financial costs:
Here is another area where you may have some fees you can claim. Costs of solicitors, accountants and other professionals can all be claimed for. Don’t forget to think about bank charges, insurance costs (eg professional indemnity), or any leasing or hire purchase costs. Again, your bookkeeper will be able to help with this.
Home Working costs:
If you work from home, you can claim a percentage of your household expenses such as heating and light, council tax, water rates, rent or mortgage interest and certain repairs, the amount depends on how much of the home you use for work purposes. Alternatively, you can use simplified expenses, which means as long as you spend at least 25 hours a month working from home you can use a flat rate to work out how much you can claim. It is worth speaking to your bookkeeper to see what would work out best for you.
How to be sure you are claiming what you should:
Realistically, there are loads of business expenses that HMRC will be willing to accept, a lot more than listed here. The onus is on you though, to prove that they are actually valid! The best way to do this is to make sure you are keeping records of your expenses. Keep hold of those receipts, and use an accounting software such as Quickbooks to keep everything together. You don’t need to send them all to HMRC, but they can ask you to produce them if they want to look into your accounts in more detail.
Struggling with what you can and can’t claim, and not sure where to turn? We recommend you speak to Mark and the team at Choice Bookkeeping. With offices in Monmouthshire and Pembrokeshire, they cover all of South and West Wales, and can make sure your accounts are fully up to date and compliant. Don’t forget, you can claim their services back as an expense! You can find out more about Choice Bookkeeping here.