Own business - what expenses etc do you claim
Discussion
What things can one claim, other than milage, meals and other expenses etc, putting them through the business.
In my first year of business, I put everything through, every last stamp etc and saved a LOT of money. Ive become rather sloppy lately and havnt saved as much as I could have, paying for client dinners in cash etc without bothering with receipts
Looking for ideas, and just keen to hear what everyone tends to put through, what "other" things one can put through (ie staff/client parties, its allowed) petty cash etc
In my first year of business, I put everything through, every last stamp etc and saved a LOT of money. Ive become rather sloppy lately and havnt saved as much as I could have, paying for client dinners in cash etc without bothering with receipts
Looking for ideas, and just keen to hear what everyone tends to put through, what "other" things one can put through (ie staff/client parties, its allowed) petty cash etc
I recall there ae some strict rules on staff parties ( £150 a year max and if you exceed the limit they won't pay any of the last event). My accountant jumped all over me this year for buying my contractors a bottle of wine at Christmas: alcohol is not allowed apparently.
I think the whole expenses thing is strictly controlled ( I have another post on the 'lunches' thing on the go) and chucking in every receipt that resembles a meal out with a client may is asking for it IMHO . I am not sure what constitutes 'entertaining' these days and what HMRC allow and disallow. I would back it up with a diary entry of some sort to show it was wholly business.
Doing on line tax returns for companies saves £250 year 1.
I make sure I use the £150 a head staff entertaining allowance.
I periodically put in one-offs for apportioned bills such as window cleaning, some cleaning materials and maintenance such as polish, shake and vac, light bulbs, repainting of the window frames in rooms that the business occupy etc. I also have a 'broadsheet' daily paper which I normally wouldn't buy which I have on an annual subscription. There are bits and bobs I keep forgetting about such as batteries for the digital camera and wireless phones, an occassional jar of coffee for visitors, local charity donations ( I don't think national charities count as you can't say that that is marketing: £50 is hardly going to buy you a thank you in their annual report.
I do keep receipts for stuff that I buy privately just to show that the costs are apportioned, for example I had some windows replaced and they double glazed the skylight in the proch at the same time so I had them do 2 receipts and have kept both.
There is a post elsewhere on claiming part of the council tax back.
My car is a company car so cleaning materials for that go in too.
Entertaining of clients, customers and suppliers is NEVER allowed - full stop.
Staff entertaining is allowed up to certain limits (which I can't remember off hand).
Treatment of allowable costs paid initially by the business owner/proprietor/shareholders/directors etc has different ramifications depending on whether the business is a sole trader/partnership or a ltd co.
>> Edited by Eric Mc on Thursday 13th April 11:02
Staff entertaining is allowed up to certain limits (which I can't remember off hand).
Treatment of allowable costs paid initially by the business owner/proprietor/shareholders/directors etc has different ramifications depending on whether the business is a sole trader/partnership or a ltd co.
>> Edited by Eric Mc on Thursday 13th April 11:02
leftie said:Cheers. I'll have a look for your thread on lunches
( I have another post on the 'lunches' thing on the go) and chucking in every receipt that resembles a meal out with a client may is asking for it IMHO . I am not sure what constitutes 'entertaining' these days and what HMRC allow and disallow. I would back it up with a diary entry of some sort to show it was wholly business.
Eric Mc said:Are you referring to business meetings over lunch, where expenses are incurred?
Entertaining of clients, customers and suppliers is NEVER allowed - full stop.
Eric Mc said:So you can only pay for your own lunch, then? (and travel expenses etc)
Yes.
If you pay for your customer's/supplier's meal (as well as your own), their portion of the total cost is "Entertaining" and is not allowed - for tax or VAT purposes.
I claimed expenses on a 'staff party' last year, at least companies are allowed that much.
Yes, your own portion of the meal is probably OK for a "subsistence" claim, although the context of the meal overall may have a bearing on whether it really is "susbistence" or not.
And yes, the staff entertaining costs are a valid claim as long as the limits per person aren't exceeded.
And yes, the staff entertaining costs are a valid claim as long as the limits per person aren't exceeded.
I've never quite understood this Eric.
When you say it's not allowed for VAT I can understand that. I don't claim VAT back on the bill. But when you say, not allowed for tax, what does that really mean? I've paid for it on my company credit card and the company pays the bill. What should be declared to whom?
When you say it's not allowed for VAT I can understand that. I don't claim VAT back on the bill. But when you say, not allowed for tax, what does that really mean? I've paid for it on my company credit card and the company pays the bill. What should be declared to whom?
Genuine "Subsistence" costs incurred by staff or directors or the proprietor of a business can be claimed by the business as genuine tax allowable business expenditure - end of story.
If the business pays the restaurant directly by its own resources (the company bank account, company credit card or company cash - it doesn't matter)or does so by re-imbursing an individual of the firm who initially paid the expennse out of their own pocket is not a relevant factor when deciding whether the cost is a tax deductable business cost or not.
Obviously, there may be some complications regarding Benefit In Kind reporting (i.e. what to put on P11d forms etc) if the individual being reimbursed is an employee or a director) but these particular "BIK" points are not relevant for deciding whether the "subsistence" cost is a bona fide business expense.
Any cost classified as "Entertaining" (except for the allowable levels of "Staff Entertaining" already mentioned) are simply NEVER allowed as a deduction against the business profits - no matter what method is used to pay them.
If the business DID pay for them and looked on them as normal business costs, there is nothing to stop those costs being shown in the business Profit and Loss account as "Entertaining" expenses. All that happens in these cases is that the amount shown under "Entertainment" is disallowed when the Tax Computations and Calculations are being prepared. In accounting terminology we refer to these as the "Add Backs" as the disallowed expenses are simply added back onto the original profit as shown in the accounts.
>> Edited by Eric Mc on Thursday 13th April 14:34
If the business pays the restaurant directly by its own resources (the company bank account, company credit card or company cash - it doesn't matter)or does so by re-imbursing an individual of the firm who initially paid the expennse out of their own pocket is not a relevant factor when deciding whether the cost is a tax deductable business cost or not.
Obviously, there may be some complications regarding Benefit In Kind reporting (i.e. what to put on P11d forms etc) if the individual being reimbursed is an employee or a director) but these particular "BIK" points are not relevant for deciding whether the "subsistence" cost is a bona fide business expense.
Any cost classified as "Entertaining" (except for the allowable levels of "Staff Entertaining" already mentioned) are simply NEVER allowed as a deduction against the business profits - no matter what method is used to pay them.
If the business DID pay for them and looked on them as normal business costs, there is nothing to stop those costs being shown in the business Profit and Loss account as "Entertaining" expenses. All that happens in these cases is that the amount shown under "Entertainment" is disallowed when the Tax Computations and Calculations are being prepared. In accounting terminology we refer to these as the "Add Backs" as the disallowed expenses are simply added back onto the original profit as shown in the accounts.
>> Edited by Eric Mc on Thursday 13th April 14:34
As self-employed with some motorsport involvement, I've put through:
- Autosport and other car mags (research)
- Sky (had to keep abreast of NASCAR & ChampCar)
- GRRC membership (long story)
- Broadband (subs and hardware)
- Computer hardware & software, ink cartridges
- MacWorld magazine sub
- Some computer books, tax guide, small business handbooks.
- The business proportion of all car costs (fuel, insurance, service, tax, AA, council parking permit), on a straight split of annual business/private mileage.
Entertainment excepted, the rule seems to be "if you can justify it as primarily for the business, or calculate a business proportion of use" with a straight face, it's worth considering. Receipts (or at least traceable details like credit card statements) are useful, as is an accountant who will say you are talking BS.
For stamps & stationery (often from petty cash), they'll normally accept a nominal sum like £50 without argument.
- Autosport and other car mags (research)
- Sky (had to keep abreast of NASCAR & ChampCar)
- GRRC membership (long story)
- Broadband (subs and hardware)
- Computer hardware & software, ink cartridges
- MacWorld magazine sub
- Some computer books, tax guide, small business handbooks.
- The business proportion of all car costs (fuel, insurance, service, tax, AA, council parking permit), on a straight split of annual business/private mileage.
Entertainment excepted, the rule seems to be "if you can justify it as primarily for the business, or calculate a business proportion of use" with a straight face, it's worth considering. Receipts (or at least traceable details like credit card statements) are useful, as is an accountant who will say you are talking BS.
For stamps & stationery (often from petty cash), they'll normally accept a nominal sum like £50 without argument.
Eric Mc said:
If the business DID pay for them and looked on them as normal business costs, there is nothing to stop those costs being shown in the business Profit and Loss account as "Entertaining" expenses. All that happens in these cases is that the amount shown under "Entertainment" is disallowed when the Tax Computations and Calculations are being prepared. In accounting terminology we refer to these as the "Add Backs" as the disallowed expenses are simply added back onto the original profit as shown in the accounts.
And if I'm right, be very careful about paying for your employees "subsistence" because it can be seen as a perk, which is subject to tax either to the employee or corporation tax.
I order up to £200 of takeaway food delivered each month. Theres no reason then, why I shouldnt put it down as a company expense as I usually eat whilst working. Correct? 
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