Understanding what expenses you can claim for your business

Understanding expenses

Without understanding the differences between business and personal expenses, you run the risk of paying more tax than you need to.

Anthony Andrews, Content Marketing Manager at Intuit QuickBooks, provides you with a few pointers to make sure you don’t get stung by a hefty tax bill on January 31st.

What counts as business expenses?

A very important point about completing the Self-Assessment is working out what constitutes as an actual expense attached to your work and what doesn’t.

Put quite simply, a business expense is any cost that is exclusively attributed to work purposes.

What expenses can you claim?

HMRC is actually quite flexible on this, so long as you can defend the item’s inclusion as being essential to your business. Typical examples include:

  • Travel expenses
  • Rent
  • Bank charges
  • Delivery charges
  • Equipment costs
  • Stock
  • Utility costs for business premises
  • Telephone fees
  • Stationery & postage

HMRC has also accepted some seemingly outrageous tax return claims. One example is the claim of a 23-year-old British woman employed by a gentleman’s club. She filed her boa constrictor for a tax reduction. It was approved after HMRC verified that the reptile was part of her act.

When it comes to those grey areas of expenses, you’ll need to convince the HMRC as to why that cost is essential to running your business. Otherwise, you should know that the following are included in items that cannot generally be claimed:

  • Parking/speeding violations
  • Tuition
  • Childcare services
  • Gym memberships
  • Client entertainment

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