SRK Answers – What Expenses Can I Claim Through A Limited Company?
As a business owner, you will be busy driving the growth of your company. It is therefore essential for you to keep track of your business costs and expenses, so that you can continue to remain profitable and reinvest those profits into fueling further growth.
However, understanding which costs are allowable for tax purposes can be a bit of a minefield and as accountants we are constantly questioned on what can be claimed or not. Therefore, we’ve designed this blog post to provide you with the answers you seek and finally answer that loaded question – what expenses can I claim through a limited company?
Genuine Expenses Only
It may seem self-explanatory but you can only claim business expenses, if they are in fact, business expenses or company expenses. Therefore, an expense claim is only valid if it was incurred though the business or through business activities and has not been classified as disallowable by HMRC. This also means that you cannot claim expenses which have a dual purpose i.e. for both personal and business use.
Business related + classed as allowable by HMRC = Genuine Expense
If in doubt, it is always best to check with an accountant as you may have to pay a misconduct fine if HMRC finds you have claimed a personal expense as a business expense.
You should always keep a record of your receipts as proof, in case you need to prove the legitimacy of your claim further down the line. HMRC states that records must be kept for a minimum of 6 years from the end of the last company financial year they relate to. Read How to Manage Receipts as a Small Business Owner for further information on receipt management best practice.
What Can I Claim?
To tackle this, rather large, question we’ve created an A-Z guide of common business costs and expenses for Limited Companies. We’ve listed the most common business costs and expenses you’ll most likely need, as well as explain HMRC’s guidance for claiming tax relief on these costs. To get your free A-Z ‘Can I Claim It?’ Guide, click the download button below.
If you’d like to discuss expenses with a fully qualified chartered accountant, please book in for a free consultation. We provide solid advice, not cheesy sales – no need to fear.
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