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CH Accountancy
CH Accountancy

01245 791164 | hello@chaccountancy.co.uk

What Expenses Can I Claim?

(Self Employed & Partnerships)

Accountancy, Legal & Professional Fees

Yes, you can claim your accountant's, solicitor's and any other professional fees (eg a Virtual PA) in most cases as long as they are soleley related to your business.

Advertising & Marketing

All advertising and marketing costs for your business can be claimed.  This includes literature you print, business cards, leaflets etc, advertisements in print and online, trade shows, as well as Networking Meeting fees. 

Animals

You may be able to claim tax relief on the costs associated with some animals.

Farm Animals, such as cattle, sheep or laying hens are tax deductible as either stock, or as a capital asset if they form a production herd (they produce products, ie milk, eggs, wool, etc).  

Some dogs may be classed as working animals (ie farm working dogs, guard dogs etc) and would be classed as a capital asset.

Costs associated with caring for these animals would also be tax deductible expenses.  These include food, insurance, vet fees.

Costs can only be included if they are soleley for business purposes - therefore costs for your pet dog cannot be claimed for.

Bank Interest, Overdraft Charges, Credit Card Charges & Paypal Fees

Business Accounts - if the charges relate to a separate business account all the fees can be claimed as an expense.

Personal Accounts - if you use your personal account for business purposes too, then only the business percentage of fees can be claimed.  

Broadband 

If you have a separate broadband contract for your business then the whole cost will be an allowable expense.  However if you use your home broadband for both business and personal then you can only claim for the business use percentage.

Business Use of Home

If you work from home you can claim a proportion of your electric, gas, water, council tax, insurance and mortgage interest or rent.  If you are lucky enough to have a cleaner you can also claim the business proportion of their costs.  The amount to claim is based on the amount of rooms in your house used for business purposes and the amount of time working from home.

Charitable Donations

You can get tax relief on some charitable donations, however these are not to be included as a business expense, they are taken into account separately in your tax return.

Childcare

You are not able to claim for any childcare costs.

Clothing

Generally clothing is not an allowable expense.  However there are a few exceptions.  If you have to wear a uniform or costume as part of your business then these can be claimed.  Logo'd clothing is also an allowable expense.  Protective clothing, ie safety helmet, high vis jacket, steel toe cap boots, aprons, etc can also be claimed as an expense.

Computer Equipment, Consumables & Software

Computer Equipment will not be classed as an expense, but will be classed as an asset and you can claim capital allowances for the costs.  You can also claim capital allowances for second hand equipment and equipment you owned personally then brought into the business.  If you use the equipment for personal purposes aswell, then only the business percentage can be claimed.  Software and consumables are classed as an expense, and only the business percentage of the these can be claimed if there is any personal use.

Cost of Sales

All costs relating to purchasing goods for re-sale or provide a service with are allowable.  Costs of servies sub-contracted to another supplier are also allowable.

Entertaining

Entertaining clients - unfortunately you can't claim any expense for entertaining clients.

Entertaining employees - this is allowable for tax relief, but only in certain circumstances.  To ensure it is a qualifying event and not a taxable benefit for your staff it must be an annual event (ie Christmas party), open to all staff, and cost less than £150 per guest present.

Food & Drink

Food and drink has always been a tricky one, as HMRC argue you need food and drink to live, therefore it is not an allowable expense.  However there are a few occasions when you can claim the costs as an expense.

At your home or office - if you don't have any staff then you can't claim the cost of food and drink you buy for when you are working at home or in your usual office.  If you do have employees you can claim the cost of basic food and drink for them, and free meals at a canteen - as long as they are available to all staff.

While travelling - you are only able to claim for food and drink when making a journey outside of your normal working pattern, or for when you are staying away from home overnight for business purposes.  Below is a handy infographic to help determine if you are able to claim your food and drink costs.

Furniture

Generally furniture cannot be claimed as an expense, but will be classed as a capital asset and capital allowances can be claimed.  Furniture includes your desk, chair, filing cabinet, etc, and must soleley be used for business purposes (if you work from your dining room table you can't claim the cost of your table and chairs!).

Gifts

Gifts to employees - these are generally not allowable as HMRC view these as a gift from one person to another, rather than from an employer.

Gifts to anyone else - as long as the gift is prominently marked with your business' name or logo and isn't food, drink, tobacco or vouchers, and costs less than £50 per recipient then you can claim the cost as an expense.

Insurance

Policies that are solely for busines purposes can be claimed.  Medical Insurance is not classed as a business expense.

Irrecoverable Debts

If your customer will not be paying you, or they have ceased to trade you can include the amount of their invoice as an irrecoverable debt.

Laundry Expense

Anyone who wears a uniform (including logo'd clothing), or protective clothing for work can claim a fixe rate laundry expense from £60 - £165 per year.  This covers the cost of washing the clothing.

Loan Interest

If you have taken out a loan for soleley business purposes you can include the interest on the loan as a business expense, but not the loan repayment part itself.

Mileage

If you use your own car or bicycle for business journeys then you can claim mileage, which covers the cost of fuel, running costs, and wear and tear.  Business journeys include any trips for soleley business purposes - seeing a customer or supplier, deliveries, going to meetings, going to the bank etc.  You must keep a mileage log (have a look at handy app Trip Catcher), and the rates are shown below.

Mileage Rates

National Insurance - Class 2 & Class 4

Your national insurance payments are not included as an expense.  Class 2 National Insurance is a weekly amount, and Class 4 are paid on your profits.  Both are paid as part of your tax return with effect from tax year 2015-16.

Office Costs

If you work from an office you can claim all of the associated costs - electric, gas, water, rent, business rates, cleaning, etc.

Parking Fines & Speeding Tickets

These are not allowable expenses, even if the fines were incurred during a business journey.  Fines for unpaid Dart Charges or Congestion Charges are not allowable either.  Any admin fees relating to these fines are not allowable either.

Personal Purchases & Drawings

These are not an allowable expense and should be excluded from your accounts.

Pension Contributions

Any contributions to your own personal pension are not classed as an expense, however you will gain tax relief in a separate part of your tax return.  If you pay contributions into a workplace pension scheme for your employees then these are an allowable expense.

Postage & Courier Costs

You can claim any postage or courier costs as part of your business as an expense.  This includes posting paperwork to customers and suppliers, delivering goods, etc.

Pre Trade Expenses

Pre trade expenses for up to 7 years before you commence trading can be included in your first accounting period and tax return.  For more information on pre trade, please read here.

Professional Subscriptions

You can claim subscriptions to professional bodies as an expense, if membership gives you the right to use a qualification and you use the qualification in your business.  For example a nurse can claim the costs of subscriptions to the Nursing & Midwifery Council, teachers can claim their NUT costs, etc.  You can claso claim subscriptions to trade associations like your local Chamber of Commerce.

Stationery

Any stationery you buy for your business can be claimed as an expense.  This includes business cards, letterheads, pens, paper, printer ink, notebooks, files, folders etc.  You can only include items purchased soleley for business purposes, so if there is any personal use then you can't claim for the cost.

Telephone (Landlines & Mobiles)

If you have a separate contract for business only then the whole cost of the contract (line rental & calls) can be claimed as an expense.  However if you use your home phone or personal mobile for business use then only the business percentage can be claimed for.

Training & Personal Development

You are only able to claim training costs for courses that update your existing skills or expertise.  You are not able to claim costs for any new skills or knowledge.

Travel

If the main purpose of your travel is for business purposes, and you can separate any personal costs, then you can claim the cost of your travel, including flighs, train tickets, tolls, parking costs and hotel/accommodation.

Vehicles

If you purchase your car or van through your company then it will be classed as a capital asset and you can claim capital allowances, based on the CO2 emmissions.  If the vehicle is purchased through the company then you would claim the actual running costs rather than mileage.  If the vehicle is used for personal journeys too, then only the business proportion of the running costs can be claimed and the capital allowances will also relfect the business use only.

Website Costs

The build of your website, hosting fees, domain fees, email hosting etc are all allowable expenses.

If you have any questions or require further clarification on any of the expenses you can or can't claim then please do not hesitate to contact me.  I can also supply mileage logs and a template for your bookkeeping upon request.

 

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