What Business Expenses Can I Claim As A Limited Company?

As a limited company, you can claim a variety of business expenses against your company’s taxable profit and in turn, reduces the amount of Corporation Tax you will need to pay. For a business expense to be eligible for this tax relief, it needs to be an expense that was incurred exclusively for the day-to-day running of the business. Personal expenses cannot be claimed unless they are also for business use. In these scenarios, only the business portion may be claimed as an expense.

Here are some common expenses that you may be able to claim:

Office expenses

Rent, utility bills, and insurance for your office space are just some of the office expenses that can be claimed as business expenses. Communication such as mobile phones, landlines, and broadband costs can also be included.

Salaries and wages

Payroll costs for your employees, including your own salary if you are also an employee of the company. National Insurance Contributions (NICs) and Pay as you Earn (PAYE) can also be claimed.

Benefits in Kind

Gifts and small benefits for employees can be classed as Benefits in Kind and are an allowance expense with no need to notify the HMRC. These gifts cannot be cash and are not meant as a direct reward for performance that is included in any work contract. They have to have a value of less than £50, for example, food or gift vouchers.

Annual Events

If there is a Christmas party held every year, part of this can be claimed as a business expense. Up to £150 (including VAT) per guest can be claimed. If you manage to keep costs low, this does not have to be only one event a year. You can spread this £150 budget across different functions. The functions need to be for staff and their guests as opposed to the business’ clients or potential clients.

Pension Contributions

If there is a contract with a pension provider, 100% tax relief on contributions can be claimed as an allowance expense but only up to a particular limit.

Travel expenses

The cost of travel and accommodation for business trips can be claimed as long as the trips are necessary for work. Trips between workplaces and visiting clients can also be claimed and will include any business vehicle insurance, repairs, and services, parking costs, toll or congestion costs, transport fares such as flights or train tickets, and accommodation and food if overnight stays are needed.

It is important to note that the mileage involved in the daily commute to and from work cannot be included in this.

Equipment and assets

The cost of purchasing and maintaining equipment and assets, such as computers, software, machinery, and vehicles.

Professional fees

The cost of professional services such as accounting, legal, business insurance, and consulting fees can all be claimed.

Advertising and marketing

The cost of promoting your business through advertising and marketing activities can be claimed as long as they are directly promoting your company to bring in sales. The costs associated with a new website, online advertising, print advertising, direct mail, and any press releases can be included.

Training and development

The cost of training and development courses for yourself and your employees

It is important to keep accurate records and receipts for all your expenses to support your claims. Many businesses do not claim all the allowable business expenses they are entitled to. Using accounting software can help you keep on top of these expenses with ease. Whilst there is a range of expenses that can be claimed by limited companies, you should note that some expenses may have restrictions or special rules, so it’s always best to seek advice from a qualified accountant or tax professional to ensure that you are claiming correctly and maximising your tax efficiency.