Claims for Expenses

Good habits when calculating expenses:

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Expense tax deductible

Self Employed

Limited Company

Accommodation costs- can claim those for a business purpose, workplace, stop over for business travel

The expense used for the sole purpose of the trade/profession can be claimed

Be aware of Capital Gains Tax and VAT on capital costs (can be claimed if VAT registered) such as office building, modifying or converting your home, Stamp Duty Land Tax which is paid by the buyer on all residential buildings, Capital Allowances can be claimed  on fixed assets for business purposes. You can claim repairs and renewals on decoration and replacement of floors, coverings and windows which relate to the business. Make sure these are not improvements though because this would be capital expenditure.

Entertainment- clients, customers and third parties

You can claim tax relief on room hire for an event such as advertising and marketing.  The cost of entertaining is not tax deductible and must be added back in the accounts. Again you can claim expenses incurred in the line of business. Entertaining staff can be claimed under staff welfare. Keep records to show evidence of the entertainment, the benefits to the business and the cost. Claims cannot be made if the entertainment is part of a corporate event. Input VAT can be claimed for overseas customers.

Business gifts

A business sample can be claimed as advertising, an advertisement gift of less than £50 but not food, drink, tobacco or a voucher. VAT can be claimed on irregular gifts. Gifts can be claimed, but not cash, to charities for cultural, religious, recreational or benevolent purposes.

Subscriptions

For trade associations are tax deductible

Medical and Dental

Not allowed unless it is proved exclusively for business not private benefit

Subsistence

Reasonable amounts can be claimed for travelling trade and the destination is not regular

Training and course fees

Business training for new skills of personal benefit is not allowed, business training for professional development is allowed. Once qualified, tax relief may be claimed on subscriptions.

Employers can claim training costs

Travel

Allowable for business needs. If the journey has some private reasons, this portion should be removed. Accommodation and subsistence may be claimed as mentioned earlier. Home to work can be claimed if it is the main workplace or a travelling occupation. Cannot be claimed if there is a third base which is frequented- not home or an operating business base.

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