What can you and should you be claiming for business expenses
Just what can you and should you be claiming for business expenses. This is one of the most frequent questions that an accountant is asked. We’ve heard the weird and wonderful and the downright illegal over the years. It’s also coming up to that time of year when business owners will be scrambling to get paperwork together for January 31st. (tsk tsk – you have had anything up to a year to get this done!!!) But enough reprimand.
There is plenty of advice on the web about business expenses and what is claimable but there is no better resource that good old HMRC themselves. The .gov.uk site https://www.gov.uk/expenses-if-youre-self-employed lays it all out clearly.
But in a nutshell, you can claim for:
- Office costs such as stationery and phone bills
- Travel costs including fuel, parking and fares
- Uniforms (not a new handbag or dress)
- Salaries and Wages
- Stock or raw materials
- Bank charges, insurance etc
- Heating, lighting, rates….. (but if you are a small business do check the Small Business Bonus Scheme as you may not have to pay rates or a reduced amount)
- Marketing and advertising
These are called allowable expenses. If you have invested in, for example equipment or machinery or vehicles for business use, these are called capital expenses.
Many small business owners work from home and have shared personal and business resources: for example the telephone and internet, heating and lighting. The rule of thumb is that if you have say a 4 room house and use one for the office then you can claim on ¼ of the bills. Your accountant will keep you right, but do have the relevant paperwork up to date for him.
It might be that using Simplified expenses is the right option for you. This method is ideal for sole traders and straightforward business partnerships. They cannot b used by limited companies though. Use the link to check out if they would work for you.
We do recommend you read the .gov information if you are unsure. HMRC have also produced an online course ‘Self-employed Business Expenses’ and there are a series of 4 webinars as well aimed at the self employed.
Now all you have to do, if using an accountant, which we do highly recommend, is get that paperwork together as soon as possible and don’t leave it till the end of January.
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How to access £9 billion public sector spending with SDP
The Supplier Development Programme supports businesses competing for the £9 billion annual spend of the Scottish public sector.
A new business can struggle to get the pricing right - we offer some simple tips
This is something, as Accountants, we come across time and time again. It’s often the reason for early business failure and it’s completely avoidable. Here are some simple tips.
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VAT Explained Part 1 - Taxes made clear
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(We loved these - especially going to Italy for 5 years!)
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Christmas Gifts and Staff
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What you need to know.........
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All Priory Clients are entered into our brand new annual Prize Draw. A welcome gift for you just at the time of year when you might need it most.
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Click here to get our Top Twenty Tips for New Start Businesses today
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