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Claiming Business Expenses in your Self-Assessment

With the 31st January deadline for submitting self-assessments just around the corner, many of you might be in the final stages of preparation or, for the last-minute filers, just getting started. It’s important at this juncture to have a clear understanding of the allowable business expenses that can be claimed.

In this article, we aim to provide a guide for those finalising their submissions and also for those who are planning ahead for the next tax year. We’ll outline the key categories of allowable expenses, offering insights that are both practical and easy to understand. Whether you’re hurriedly gathering your financial information now or taking notes for a smoother process next year, this guide is designed to help you identify and claim the relevant expenses effectively.

So, let’s get started…

Firstly, what is a business expense?

Before diving into the specifics of allowable expenses, it’s essential to understand what constitutes a business expense. In simple terms, a business expense is a cost incurred in the ordinary course of running your business. These are the expenses that you need to pay out to keep your business operational and generating income.

The key criterion for an expense to be considered a business expense is that it must be “wholly and exclusively” for the purposes of your business. This means the expense should be made solely for business reasons and not for personal use. If an expense is for both business and personal use, you can only claim the portion that is used for business.

Allowable business expenses

Staff costs

Your team’s costs – including salaries, bonuses, pension contributions, and even National Insurance Contributions – are all claimable. This extends to payments for subcontractors and temporary staff. Also, if you’re investing in training courses that enhance your team’s current job skills, these expenses are eligible too

Business premises costs

If you have a dedicated business premises, expenses like rent, utilities, property insurance, and maintenance are all part of your allowable expenses. For those working from home, you can claim a portion of these costs, based on the business use of your home.

Office costs

When it comes to the essentials for your office – like stationery, printing, and postage – these are all part of your business expenses. The same goes for any software that’s key to your operations. Just remember, these items are claimable as long as they’re used solely for your business. And for those bigger purchases, like office furniture or computers, you can claim these too under Capital Allowances.

Legal and financial costs

Professional fees for legal, accounting, and financial advisory services, which are directly related to your business, are typically claimable. These services are crucial for ensuring your business’s compliance and effective management.

Travel expenses

Traveling for business? You can claim expenses like fuel, train tickets, taxi fares, and even airfares. If your business trip requires an overnight stay, your hotel and meal costs are also covered. However, your regular commute isn’t included, unless it’s to a temporary work location.

Marketing and entertainment

Your marketing expenses, including advertising and promotional activities, are generally claimable. However, entertainment expenses, even if they are for business purposes, are usually not eligible for claims.

Stay informed

Remember, staying informed and proactive about your expenses can make a huge difference! Whether you’re finalising this year’s submission or planning for the next, understanding what you can claim is key to managing your finances effectively. If you’re feeling overwhelmed or unsure about any aspect of your business expenses, don’t hesitate to reach out to us at BK Plus .

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