What are Allowable Business Expenses
How Allowable Business Expenses Reduce Your Tax Bill
- Getting receipts to support all your business expenses;
- Having an organised system for filing your business receipts so you don’t loose any paperwork;
- Understanding which of your expenses are allowable and disallowable.
Examples of Allowable Business Expenses
- cost of goods bought for re-sale or cost of raw material used
- salaries, wages, bonuses and pensions
- car and van insurance, repairs, servicing, fuel, parking for business use vehicles
- rent for business premises, business and water rates, light, heat, power and property insurance
- marketing; advertising, email campaigns, website costs
- phone and internet costs
- trade or professional journals and subscriptions
- accountants, solicitor’s and other professional fees
- bank, overdraft and credit card charges
Business Expenses You Use Personally
It’s common that someone who is self employed you may buy something for business use but also use it personally, for example a laptop. In these cases HMRC allows a claim for the portion of the item being used for the business.
Say you use your laptop 60% of the time for business and the rest for personal things like internet shopping or facebook. You would be able to claim for 60% of the cost of the laptop as an allowable business expense against your taxes.
How to Claim Allowable Business Expenses
Anita is a Chartered Accountant with over a decade of experience taking self employed business owners from financially confused to business savvy.
She is the creator of the ‘Go Self Employed’ website, which her corner on the internet where she makes self employment less terrifying.