As your bookkeeper, it’s essential to understand which expenses are tax allowable, as these can significantly reduce your taxable profit.
General Rules for Allowable Expenses
You can claim expenses for items you would typically use for less than two years, such as stationery and office sundries. Additionally, costs like rent, rates, power, and insurance are also allowable.
Specific Allowable Expenses Listed by HMRC
- Office Costs: This includes stationery, phone bills, and other office-related expenses.
- Travel Costs: Allowable travel expenses include fuel, parking, train, and bus fares.
- Clothing Expenses: You can claim for uniforms and other necessary work attire.
- Staff Costs: Salaries and subcontractor costs fall under allowable expenses.
- Stock and Raw Materials: Items you buy to sell on, such as stock or raw materials, are deductible.
- Financial Costs: Insurance and bank charges are included.
- Business Premises Costs: Heating, lighting, and business rates for your premises are allowable.
- Advertising and Marketing: This includes costs for maintaining a website and other marketing expenses.
- Training Courses: Training that is directly related to your business operations can be claimed.
Training Costs
You can claim training costs if they help you:
- Improve skills and knowledge you currently use for your business.
- Keep up to date with technology used in your industry.
- Develop new skills and knowledge related to changes in yourindustry.
- Develop new skills and knowledge to support your business, including administrative skills.
Non-Allowable Training Costs
You cannot claim for training courses that:
- Help you start a new business.
- Expand into new areas of business not related to your current activities.
By understanding and correctly claiming allowable expenses, you can reduce your taxable profit and enhance your financial management.
If you need assistance with identifying allowable expenses or any other bookkeeping services, feel free to get in touch.
Source: HMRC.