Running your own business can be a great experience – it gives you the freedom to decide what you do and how you work. But it also means that you need to be up to date on finance legislation and how to manage your business expenses.
Claiming for business expenses can reduce your tax bill, so it’s well worth doing. But you need to take the time to understand what HMRC classes as a business expense and what they don’t. This will help you avoid making any illegitimate claims.
To help you start reducing your tax bill, here are 8 things you can claim as business expenses and save money.
1. Business travel
If you have to travel as part of your work – which you probably do – then you can claim this as a business expense. You can claim 45p a mile for the first 10,000 miles travelled in a financial year and 25p for every mile after that.
Make sure you keep a record of all your journeys and the vehicle you use so you’ve got proof if you need it.
If you travel so far that you have to stay away from your permanent address for any length of time, you can claim this as a business expense too. You can also claim for your meals while you’re away, within reason.
Again, make sure you keep your receipts, so you’ve got a record of what you’ve spent when.
3. Mobile phone
You can also claim mobile phone costs as a business expense if you use one for work. You can do this even if you use it for personal use too, as long as you only claim for business calls and texts. This can get a little complicated, so if you have a phone that you use for business and leisure, then get some further advice before you claim.
Clothing is another thing that you can claim as a business expense. But it does need to be a piece of recognised PPE (personal protective equipment) or a branded uniform. You’re not allowed to claim other types of clothing as a business expense, even if it’s something you personally wouldn’t wear out of work.
Most businesses need stationary like pens, notebooks and business cards. You can claim these as a business expense, as long as the amount that you get doesn’t exceed your business needs.
Training is another legitimate business expense that you can claim for, as long as it’s relevant to the work that your company does. Travel and meals when you’re attending training count as a business expense, as do subscriptions to any professional bodies.
You can also claim childcare as a business expense. If the childcare provider is registered, you can arrange for your company to pay them directly. This is, however, limited to £55 per week.
8. Accountancy fees
Unless you’re incredibly well organised, you’ve probably got an accountant to help you with the financial side of your business. You can claim their fees as a business expense, as they help you run your company.
Whenever you claim a business expense, it’s really important to keep the receipt. It’s a legal requirement to retain expense records for at least 6 years, so make sure you’ve got a good filing system. Lots of people choose to make digital copies of their receipts and store them online.
To find out more about claiming business expenses, take a look at the government’s website.
Got any tips on claiming business expenses? Tweet us at @quotatispro