What expenses can you claim – limited companies?

There are two kinds of expenses to consider :

1. Employee/director related expenses.
2. All other trading expenses of the company

Regarding the latter, if the expense is wholly and exclusively incurred in the course of the business of the company, it is allowable. It is the employee or director related expenses that are more restricted, only being allowable if they are wholly, exclusively and necessarily incurred. So here are some categories to consider… 

Travel and subsistence – The basic principle is that commuting expenses are not allowable. However, it you travel from your usual place of business to clients, then these expenses can be claimed, together with an allowance for subsistence of £5 for 5 hours or more of travel, £10 for £10 or more (in both cases an extra £10 if travel is ongoing after 8pm),and £25 if 15 hours or more. 

Home-working costs – £4 per employee per week is allowable to cover utility costs. Any other costs may also be claimed if it can be demonstrated that they have been incurred necessarily in the course of employment duties. 

Mobile phones – Specific provision is made in law to allow the expense of one phone per employee. 

Work-related training – Any training which is likely to improve the employee’s performance of his job will be an allowable expense. This includes related costs such as examination fees. 

These are just a few examples of many possible expenses that could arise in the course of running your business. Claiming expenses accurately is an important part of mitigating tax liabilities.