Do I have to pay tax on expenses?

Jordan Macey

September 3, 2021

Do I have to pay tax on expenses? guide
No items found.
Download Now ↓
Small Business Accounting

You do not need to pay tax on allowable business expenses. These are essential business costs that are incurred “wholly and exclusively” for the purposes of running the business. They can be deducted against your income, thereby reducing the amount of tax that you need to pay.

For further information on the types of expenses you can claim, refer to our guides for sole traders and limited company directors.

Download our Ultimate Expenses Guide

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
No items found.
No items found.

Download our Ultimate Expenses Guide

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
No items found.
No items found.

What's Inside:

No items found.

Read More Guides below:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
How long do I need to keep accounting records for? Guide

How long do I need to keep accounting records for?

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Utilities? Guide

Can I expense Utilities?

If you're renting an office, you can claim utilities as a deductible expense.

If you're using your home as an office, you'll need to work out the proportion of your utilities that you can allocate to business use in order to claim these costs as a deductible expense.

For further information on allowable business expenses, refer to our expenses and allowances guides for limited company directors and the self-employed.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Self employed expenses & tax allowances guide Guide

Self employed expenses & tax allowances guide

Allowable business expenses are costs that you can claim as a deduction against your revenue, which reduces the amount of tax you need to pay.

Here's an example: if your revenue is £35,000 and your allowable expenses total at £5,000, you'll just be taxed on £30,000.

The rules surrounding allowable business expenses aren't always straightforward, and this is where our guide comes into play.

In this article we will run through the most common expenses that sole trader businesses claim for, along with tips you can implement to ensure that you are keeping proper records.

Bear in mind that this isn't a definitive guide, so if you need personalised advice, it's best to consult our accountants atForma.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Christmas gifts for staff? Guide

Can I expense Christmas gifts for staff?

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I claim using the cycle to work scheme? Guide

Can I claim using the cycle to work scheme?

Employers who purchase bicycles and safety equipment for loan to employees can benefit from treating the purchase as capital expenditure eligible for corporation tax relief. VAT can also be claimed back on the purchase unless you are registered on the VAT flat rate scheme.

The loan of bicycles and safety equipment under the cycle to work scheme removes any tax charge to the employee that would usually arise on a taxable benefit.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
How do I receive tax free childcare? Guide

How do I receive tax free childcare?

To get tax-free childcare, you need to:

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Hotels and bed & breakfasts? Guide

Can I expense Hotels and bed & breakfasts?

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Optical expenses? Guide

Can I expense Optical expenses?

You can claim an eye test as an allowable expense, if it is required for the use of visual display equipment in your work.

In general, you can't claim for glasses or contact lenses unless these items are 'wholly and exclusively used for business purposes', and you're able to prove that you don't use them outside of your working houses. One example would be that you have several pairs of glasses, one of which is used only when you're at work.

For further information on allowable business expenses, refer to our expenses and allowances guides for limited company directors and the self-employed.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Business gifts? Guide

Can I expense Business gifts?

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Limited Company Expenses Guide Guide

Limited Company Expenses Guide

  • Allowable business expenses
  • Employee expenses
  • Travel expenses
  • Office & equipment expenses
  • Professional services expenses
  • General expenses
Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Business Rates? Guide

Can I expense Business Rates?

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense my use of home as an office? Guide

Can I expense my use of home as an office?

There are two methods you can use to work out your allowable home expenses: you can claim a flat rate allowance (also known as simplified expenses), or claim a proportion of your bills. For further information on these methods, refer to our expenses and allowances guide for limited company directors and the self-employed.

If you're a sole trader and aren't sure which method is the better option for your business, you can use Gov.uk's simplified expenses checker tool.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Legal costs? Guide

Can I expense Legal costs?

The costs incurred for engaging professional services-such as hiring a lawyer-can be claimed as an allowable expense, as long as these services are carried out solely for business purposes.

For further information on allowable business expenses, refer to our expenses and allowances guides for limited company directors and the self-employed.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Taxi fares or an Uber? Guide

Can I expense Taxi fares or an Uber?

Taxi fares are generally deductible, as long as the fares aren't incurred for ordinary commuting. According to HMRC, a commute is a trip you make most days between your home and permanent workplace.

For further information on allowable business expenses, refer to our expenses and allowances guides for limited company directors and the self-employed.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I claim for fuel as well as mileage? Guide

Can I claim for fuel as well as mileage?

Mileage claims are designed to help cover your fuel costs, as well as the running costs of having a vehicle. As such, you can't make separate claims for individual expenses such as fuel, electricity or vehicle repairs.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I claim personally paid expenses? Guide

Can I claim personally paid expenses?

There may be times when you have no option but to use your personal funds to cover company costs such as paying by cash or if you forget to bring your company card. It's important to keep a copy of the receipt of all expenses but this is especially important when paying for costs and expenses personally. This way, a record of the cost can be kept, logged in your company accounts and then your company can reimburse you for this.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Cleaning? Guide

Can I expense Cleaning?

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
How do I receive a tax incentive benefit? Guide

How do I receive a tax incentive benefit?

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Can I expense Stationery? Guide

Can I expense Stationery?

Yes, you can claim office costs (such as the purchase of stationery) as a deductible expense.

For further information on allowable business expenses, refer to our expenses and allowances guides for limited company directors and the self-employed.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Company car tax: The basics explained (and recent changes you need to know) Guide

Company car tax: The basics explained (and recent changes you need to know)

The tax implications of providing a company car can be complex-and made even more confusing by HMRC's tax changes.

To help you along, we've put together an article that will guide you through the essentials.

We'll start with the basics, explaining who pays for company car tax and how it is calculated, before we run you through a quick summary of tax rates changes that were announced in July 2019.

Our article will likely answer the key questions that you have surrounding company car tax, but bear in mind that it isn't a substitute for professional advice. If you have further questions about tax and how it affects your business, do reach out our accountants at Forma for personalised advice.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.