There’s little worse than seeing all your hard-earned profits going straight to the tax office. Knowing what you can and can’t claim as allowable expenses can make all the difference.
Many people are aware of the more common, basic expenses like mileage and office costs, but there are also others that often get forgotten about. Here’s our list of lesser-known deductibles!
1. The Office Shindig
The Christmas party has the uncanny ability to break a career over the course of just one evening, but it’s also deductible in your tax return, if you’re claiming under £150 a head. Whilst wining and dining clients can’t be claimed for, there’s nothing stopping you when it’s for members of staff, as long as everyone’s invited! A bash for just the directors does not count (and is kind of mean…).
2. Costs for Professional Services
Fees for professional financial or legal services can be deducted, as long as they’re for business purposes, including the costs of any solicitor you hire, unless you’re hiring them because you’ve broken the law. And yes, you can also claim for the cost of any accountancy work too!
3. Mobile Phones
There are different rules for different types of businesses. If you’re a sole trader, you need to work out the proportion of business/personal calls and deduct accordingly. For limited companies though, if the bill is in the name of the business, it’s entirely deductible, regardless of whether you or your employees also use it for personal use.
4. Financial Costs and Charges
While you can’t claim any costs for business loan repayments, did you know you can claim your interest payments on expenses? The same applies to any bank, credit card or overdraft charges you might encounter in your business. Bonus!
Certain types of clothing are deductible from your profits, but there are rules to it. Specific uniforms are allowed, as is specialist protective clothing, but everything else is not. So a baker’s apron with a logo on would be allowed, as
would steel toe-capped boots. But anything else is a big fat no. It has been tried and tested and taken to tribunal for decades (claiming for suits when you’re not a ‘suit person’ for example), and HMRC are super strict about this one.
Spreading the word about your business can be expensive (although it doesn’t have to be! Our blog last week has some great tips on how to stretch your budget). The good news is that this all falls under allowable expenses. You can deduct any cash paid for advertising, running a website and even for costs associated with any free samples you give out.
Subscriptions to any professional bodies or necessary academic journals count as a deductible expense, if HMRC say so! There’s a full list available here. Sorry, but personal subscriptions like your gym membership or your monthly copy of Cosmo don’t count.
For bespoke advice on expenses or to maximise your profits, get in touch with us today.