Business Expenses – What Can You Claim?

It is always beneficial for you to claim Business Expenses through your Company where applicable. Business Expenses submitted for your Company are tax deductible and subsequently, reduce the amount of Corporation Tax that your Company will be liable for.

The main expenses that you can claim are :-

  • Business travel and accommodation including mileage covered by car, bicycle or motorbike;
  • Meals and subsistence while away from home;
  • Postage, stationery, phone calls
  • Child Care
  • Business entertainment
  • Home office

HM Revenue and Customs’ (HMRC) general rule for claiming business expenses is that they must be ‘wholly, exclusively and necessarily incurred in performing your duties’.  If an expense has duality of purpose (ie it is for both personal and business purposes) then it usually cannot be claimed. All expenses need to be included on an Expenses Claim Form, even if the business has paid for it direct from the business bank account or by Business Credit Card.

It is important to note that although you do not have to include copy receipts when you send in your expense claims, HMRC requires that you retain all original expenses receipts for a period of 6 years.

One final note – the ‘Business Expenses’ quoted under Monthly Cashflow on Page 1 of your Business Snapshot refers to the total amount withdrawn from your Business Bank Account during the month in relation to the expenses.  Expense claim forms submitted during the month do not show on your Snapshot but have been accounted for when calculating your corporation Tax quoted on Page 2 under ‘Monthly Liabilities’.

If you require any advice regarding expenses then please don’t hesitate to contact your QAccounting or your Account Manager.