Falcon Invoice Discounting: Empowering Your Business Growth
What type of expenses are claimable as business expenditure
1. WHAT TYPE OF EXPENSES CAN BE CLAIMED AS BUSINESS EXPENDITURE
A business expenses is one where the cost is incurred wholly, exclusively and necessary for your
business according to HMRC’s guidelines. Therefore, you should record all of the expenses and costs
that you incur in the cost of running your company.
The expenses that you can claim will also be both ones that are chargeable to customers/clients and
non-rechargeable.
You should obtain and retain receipts or invoices wherever possible and these can be from a
shop/business as well as online.
You need to be aware of any expense that has a `duality of purpose’ –this is where there is both a
business and personal element such as a trip abroad which is part business / part holiday. If there is
any suspicion that the expenses may not have occurred if it were not for the personal element it
could be disallowed.
The types of expenses that are generally allowed are:
Business travel and accommodation (this can include hotels or B&B’s or even a temporary
rented accommodation and various utility bills) –subject to the 24 month rule
2. Meals and subsistence when working away –subject to the 24 month rule
Personal Incidental Expenses (PIEs) when staying away from home overnight for work -
reasons -£5 per night in the UK and £10 per night outside the UK –this cost is to cover sundry
type expenses such as phone calls home, coffees, laundry etc
Other travelling expenses when travelling to other locations for business reasons other than
your normal place of work such as attending interviews, visiting the bank or accountant,
attending training courses and seminars, trips to buy company supplies etc
Mileage in your private vehicle at HMRC allowed rates -45p per mile for the first 10,000
business miles and 25p per mile for each mile thereafter. You can also claim mileage for
travel in your private motorbike (24p per mile) or private bicycle (20p per mile)
Motoring expenses using fixed rate allowances (e.g. claiming the distance travelled)
Entertaining costs however if these are for entertaining past, present or potential future
clients they are not tax-deductible however it is better that your company pays for these
rather than you personally
Salaries for all company staff (normally yourself and perhaps your spouse)
Company pension scheme contributions
Employer’s N.I. contributions on salaries above the NI threshold
Business telephone calls
Mobile telephone and calls
Broadband charges
Postages and stationery, business cards
Bank charges and interest
Printing costs
Annual eye test cost and cost of spectacles if you use these for work
Computer equipment purchased for business purposes such as desktops, laptops and other
office type equipment
Computer software
3. Technical books and journals
Advertising and marketing including the cost of setting up and running a website for your
company
Local business sponsorship if it can benefit your business
The cost of professionally updating your CV and LinkedIn profile and other social media
advertising
Professional training courses if connected to your contract work
Certain professional subscriptions to professional organisations and institutions
Magazine/newspaper subscriptions –if connected to your contract work
Annual £13 fee to Companies House for filing the Confirmation Statement. Any other
Companies House fees when certain changes are made such as changing the company name
Business gifts –up to £50 per gift –subject to certain conditions
Use of home as office –under HMRC allowed rates you can currently claim £4 per week –you
may be able to claim more if you can justify that your household running costs come to
more than £4 per week for running your business from home
Annual event of up to £150 per employee –typically your annual Christmas dinner
Business insurance such as professional indemnity insurance
Relevant Life insurance –this can be as much as 50% cheaper when you pay via your
company compared to paying this personally
Income protection (to provide you with income if you cannot perform your contract work for
a period of time)
Accountancy fees –typically a monthly payment plus any one-off fees
Legal and other professional fees in connection with business related issues
Relocation costs –up to £8,000 and subject to certain conditions
Any company formation costs