Here is a list of expenses you can claim as a limited company.
This relates to costs directly related to sales.
For example, if you were building a house, the direct costs would be the bricks, cement, windows, etc required.
These are people you pay to complete a particular task - they aren't employees. If you pay someone to help you complete a particular section of work they would be classed as a subcontractor.
You will need to register for CIS if you pay subcontractors within the construction industry, click here for details.
Employee costs include: wages, pension contributions & employee benefits.
This includes the salary paid to company directors. It's usually tax efficient to pay a director/shareholder a small annual salary and top this up with dividends.
If you have business premises then you may pay rent, business rates, gas, electricity, water and cleaning costs. All of these costs are allowable for tax purposes. If you rent a storage unit for stock or provide parking spaces to employees at or near your work then these are also business expenses.
Use of home
If a substantial amount of time is worked at home you can claim £4/week. This can be paid to all directors (and all employees) working from home.
We would suggest taking out either public liability and/or professional indemnity insurance to cover your business. If you have employees you are required by law to get employers' liability insurance (you may not need employers' liability insurance if you only employ a family member or someone who is based abroad.
Public liability insurance protects against claims of personal injury or property damage that a third party suffers (or claims to have suffered) as a result of your business activities.
Professional indemnity insurance (also known as professional liability insurance) helps protect professional advice and service providing businesses from bearing the full cost of defending against a negligence claim made by a client.
Employers' liability insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you.
Software & IT costs
Laptop, desktop, tablet, mouse, keyboard, printer
Bookkeeping software (Quickbooks/Xero)
If you have a premises you can claim for the full cost of the office phone there.
You are also able to claim for mobile phone costs for you and your staff. If the mobile contract is in the company name you can claim the full cost but if the contract is in the persons name you may only claim for the additional business call costs.
Postage, printing and stationery
Stamps, envelopes, pens, paper, pads, paper clips, etc - you get the picture!
Advertising & website
Travel & subsistence
Incidental overnight allowance
Mileage, costs (BIK - P11D)
Mileage, costs (BIK - P11D)
Removing, destroying or storing damaged, used or other unwanted products and/or substances.
Small tools & equipment
Safety boots, helmets, goggles, high visibility jackets, ear defenders or any other equipment designed to protect the wearer's body from injury or infection.
Training, books & journals
Non cash gifts under £50
Membership & subscriptions
Client entertaining (e.g. food, drink, accommodation, theatre or sporting tickets). The business can pay for this entertainment, however it is not allowable for corporation tax purposes and VAT cannot be recovered.
Hospitality can only be treated as allowable for corporation tax if something of equivalent value is given in return ("quid pro quo").
Staff entertaining this is allowable for corporation tax purposes as long as it is wholly and exclusively for the purposes of trade. Unless it is covered by a particular exemption, a personal tax charge could arise on the employees for any benefit they are getting from this.
Bank charges & credit card costs
You can't include costs for personal cards - the cards must be in the business name.
Bank charges - monthly fees, specific transaction fees (including foreign currency), exceeding overdraft fees, interest.
Credit card costs - monthly fees, late payment fees, foreign currency fees, interest.
Loan interest -
Hire purchase costs -
Fixtures & fittings -
Plant & machinery -
Motor vehicles -
Computer equipment -
Common expenses people mistakenly claim for:
- Personal clothing that isn't protective or branded.
- Physiotherapy costs