Employment Allowance enables eligible employers to reduce their National Insurance bill by up to £4,000 each year.
Download our Ultimate Expenses Guide
Download our Ultimate Expenses Guide
Read More Guides below:
Can I expense Computer equipment?
Yes, you can claim the purchase of computers as a deductible expense.
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.
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.
Can I expense Conference expenses?
Yes, you can claim the costs of attending business-related conferences as a deductible expense.
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.
Can I expense Parking?
You can claim parking costs as a deductible expense, as long as it is incurred wholly and exclusively for business purposes. Other allowable business travel expenses include tolls and congestion charges. You can't claim parking fines as a deductible expense.
What expenses can I claim as a contractor?
As a contractor, there are a vast number of different expenses that can be claimed for when working through a limited company.
These expenses must be deemed wholly, exclusively and necessary for business to carry out it's duties and some examples can include:
- Food (subsistence)
- Computer & office equipment
- Postage & Stationery
- Accountancy & professional fee's
- Telephone & internet
Can I expense general travel expenses?
General travel expenses can't be claimed as a deductible business expense. You can only claim for travel-related expenses as long as the trip is made wholly and exclusively for business purposes, and isn't considered 'ordinary commuting'.
Can I expense Marketing costs?
You can reclaim marketing expenses as long as these are used solely for business purposes. This applies to both one-off costs and ongoing fees.
Can I expense Phone calls?
As a sole trader:
If you're using your mobile phone line for both business and personal use, you can't claim for line rental. However, you can claim for call costs for business use if you obtain an itemised bill. If you have a separate mobile phone line for business use, you can claim the costs incurred.
As a limited company director:
1. Mobile phone: If your mobile phone contract is between your company and mobile phone provider, and is used for solely business purposes, you can claim the entire bill as an allowable expense.
If you have a personal contract, you can claim for the costs incurred for business calls. You're also able to reclaim the VAT element of the business calls.
2. Landline: If your landline contract is solely for business use, you can claim the cost as an allowable expense. You can also claim for business calls you've made using your home phone line.
Self employed advisory fuel rates guide
Advisory fuel rates are recommended repayment amounts a company can use when reclaiming the fuel element on business mileage.
The rates are used to calculate:
- How much employers should reimburse employees for business travel using the company car
- How much employees need to repay employers for private travel using the company car
- The VAT you can claim back on business mileage using your personal vehicle
Can I expense Training costs?
Professional development costs can be claimed as an allowable expense, as long as the course content directly relates to your trading activity.
Training courses that you attend to learn a new skill-which you can use to expand into a new industry or offer different services-aren't allowable, unless you can show that these courses are helping you build up on your existing skills or knowledge.
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.
What expenses can I claim as a Limited Company Director?
As a limited company director, there are various allowable business expenses you can claim for. These include (and aren't limited to):
- Pension contributions
- Staff expenses
- Business mileage
- Mobile phone, landline and broadband expenses
- Costs of forming your company
Further information on the types of expenses you can claim for can be found in our limited company expenses and tax allowances guide.
Can I expense Social Media Ads or Marketing Costs?
Yes, you can claim the costs of social media ads as a deductible expense.