Saturday 2nd July 2022
Search our articles
Generic filters
Filter by Categories
Analysis
Apprenticeships
Automotive
Awards
Business Growth
Business Show
Campaign
Cashflow
Charity
Conference
Construction
Credit Management
CSR
Cyber Security
Debt Recovery
Digital Marketing
Economy
Education
Employment
Employment Law
Expo
Exporting
Feature
Finance
Focus
Foreign Exchange
GDPR
Google Adwords
Hospitality
Immigration
Insolvency
Insurance
Interview
Isle of Man
IT Support
Lifestyle
LinkedIn
Networking
Networking
News
Panel Debate
Photography
PPC
Preview
Property
R&D Tax Refund
Review
Risk Management
Round Table
Safety
Sectors
Security
SEO
Support
Symposium
Telecoms
Traineeships
Uncategorised
Uncategorized
Wellbeing
Winners
Workplace
Search our articles
Generic filters
Filter by Categories
Analysis
Apprenticeships
Automotive
Awards
Business Growth
Business Show
Campaign
Cashflow
Charity
Conference
Construction
Credit Management
CSR
Cyber Security
Debt Recovery
Digital Marketing
Economy
Education
Employment
Employment Law
Expo
Exporting
Feature
Finance
Focus
Foreign Exchange
GDPR
Google Adwords
Hospitality
Immigration
Insolvency
Insurance
Interview
Isle of Man
IT Support
Lifestyle
LinkedIn
Networking
Networking
News
Panel Debate
Photography
PPC
Preview
Property
R&D Tax Refund
Review
Risk Management
Round Table
Safety
Sectors
Security
SEO
Support
Symposium
Telecoms
Traineeships
Uncategorised
Uncategorized
Wellbeing
Winners
Workplace
You are here: News » Archived News » What are considered deductible and non-deductible expenses?

What are considered deductible and non-deductible expenses?

Can you claim lunch with a client as a business expense? How do you manage employees’ expense claims? What if you’re self-employed and work from home? There are so many questions around what can and can’t be claimed as expenses by a business, and there have been several requests directed through GMBC magazine for this topic to be covered. In this issue, Les Leavitt, Managing Partner at local accountancy firm LWA, has written a practical article that aims to answer these questions at a top level around business expenses.

The structure of your business
Claiming expenses is ultimately going to reduce your profits and therefore any tax payments due on your profits, however what you can and can’t claim, as well as rules around submitting expenses, can vary depending on how your business is structured. For example, if you’re self-employed, you cannot claim money used for a private purchase as a business expense, whereas if you run a limited company, any item purchased for personal use must be reported as a company benefit. So, it is best to check your specific circumstances with your accountant.

Allowable expenses for business
It’s important to check what is considered deductible and non-deductible by HMRC. For example, that suit you bought for your meeting next week cannot be claimed as Uniform! Items classed as business assets or things you buy to keep and use for your business can be claimed as a capital allowance. Such items include computers, printers, business vehicles and other equipment and machinery.

Simplified Expenses
If you’re a sole trader, simplified expenses may be a better option than trying to work out actual business costs for the areas covered in the above table, where flat rates are used instead. This format of accounting may be more suitable particularly if you work from home or live in your business premises. They’re also considered easier to use when working out business costs for vehicles.

An easier way of logging expenses
If you’re still keeping receipts piled up until you manage to find a few hours spare to record them on your business expenses spreadsheet or accounting software, you might want to consider subscribing to a pre-accounting platform. Receipt Bank helps businesses save valuable hours of time by pulling information from receipts and invoices quickly, accurately and efficiently all by simply taking a photograph with a mobile phone. From the comfort of your own smartphone, whilst waiting for meetings to begin, or whilst on your commute home, you can add receipts and invoices without the need of an office computer. LWA have recently been accredited as Gold Partners with Receipt Bank allowing us to provide FREE unlimited subscriptions to our clients, saving them £25 per month per user.

Les Leavitt, LWA

For more information on what can and can’t be claimed as an expense, please visit HMRC’s Business section on their website. If you’d like support on maximising profits whilst minimising tax on your business accounts, or to learn more about Receipt Bank, speak to a member of the LWA team in Warrington on 01925 830 830 or call our South Manchester office on 0161 905 1801

www.lwaltd.com

Share this post

More like this

Finance
April/May 2022

There was huge emphasis on the global economic impact following the “unprovoked, premeditated attack Vladimir Putin launched on...

Finance
December/January 2022

Making Tax Digital (MTD) will become compulsory for all VAT registered businesses from 1st April 2022. With this...