Personal and dividend tax
Allowable business expenses: what can you actually claim?
Claiming legitimate business expenses is one of the simplest ways to reduce your tax bill, yet many owners either miss costs they could claim or claim things they should not. The guiding principle is more useful than any list.
The wholly and exclusively test
For an expense to be allowable, it generally needs to be incurred wholly and exclusively for the purposes of the business. That test is what decides most cases. Where a cost has both a business and a personal element, often only the business proportion can be claimed.
Costs owners often miss
- Use of home as an office, calculated on a reasonable basis
- Business mileage and travel
- Professional subscriptions and training relevant to the work
- Software, equipment and the tools you use to trade
Costs owners get wrong
Entertaining clients, ordinary commuting and clothing that is not genuine protective or branded workwear are common areas where owners claim too much. Getting these wrong can cause problems if HMRC looks closely, so it is worth being accurate rather than optimistic.
Want this applied to your own numbers?
Book a free 30-minute call and we will tell you, honestly, where your biggest tax wins are.
Claim everything you should, nothing you should not
Every business is different, and the right move depends on your full financial picture. Book a free 30-minute call and we will tell you, honestly, where your biggest tax wins are.