Keeping track of everything that is and is not allowed to be claimed as an expense when running a limited company can be hard work. With so many HMRC rules, it is easy to get confused. Thankfully RJF Accounting has your back! Below you will find the most common expenses that limited companies did not know they could claim to reduce their tax bill!
Who does not like a party? Did you know that you can claim for the cost of your Christmas party so long as it meets specific guidelines under current rules? So long as your Christmas party is:
- Under £150 per person
- Open to all employees
- Only held once a year
If your party meets all of those criteria, you can claim its cost back as an expense! This applies to sole directors, too, so you can throw yourself a Christmas party even if you do not have any employees!
Are you thinking of buying a client a gift? Then you could be eligible to claim this as an expense. Gifts are intended for those who are not employees and include the following:
- The item cannot be vouchers, food, drink or tobacco.
- It should cost £50 or less.
- It should be marked with your business logo.
So long as it follows those rules, it is an allowable expense under current HMRC guidelines.
Eye Test & Glasses
Do you need an eye test? Or glasses to enable you to work at a computer? You can claim the cost of an eye test as an expense. However, you cannot claim for any frames, lenses or contact lenses required as they pose a dual-use and not solely for business use purposes.
Most company directors know they can claim 45p per mile for driving to a temporary workplace or any business mileage, but not many know that you can also claim 20p per mile for making the same journeys by bike too! Time to start getting those miles in by pedal power!
Books, Journals and Magazines
If you buy or subscribe to books, journals, and magazines relevant to your business, they can also be claimed as an expense. For instance, if you work as an SEO and are reading up on technical SEO, then a book relevant to the subject could be claimed, or if you work as a car dealer, a subscription to Auto Trader would be an allowable expense.
There are two ways to pay into a pension – privately and via your limited company. You can pay into an HMRC approved pension scheme via your limited company and help to reduce your tax liabilities.
These are just a few of the most common missed expenses that company directors miss. There are more, and if you doubt an item or expense can be used, it is always best to speak to a qualified accountant.
Further reading on expenses from RJF Accounting: