If you’re a business owner, January brings a certain pleasure. Tax return time!
We all know we can claim for office supplies and postage. But what about everything else in your business?
If you want to make sure you’re not paying a penny more in tax than you have to…read on. Because we’re talking 10 things you might never have thought about claiming before!
Just to be clear – this is not a blog about dodgy ways to beat the tax man.
HMRC rules make it very clear that anything you claim must be ‘wholly and exclusively’ for business.
You can’t claim for anything that’s not related to your business, or that you’d have no reasonable need to have. So you couldn’t claim for a pizza oven, for example, unless you run a restaurant or pizza making business (even if you do really want one for the garden).
If you buy something that’s partly related to your business, you can claim a proportion of it.
So if you use your mobile phone for roughly 50% business use, it would be ‘reasonable’ to claim for 50% of your monthly phone costs.
The key is to be sensible and not draw attention to yourself, by trying to do something too clever!
So here’s 10 less obvious things, that you might not know you can claim…
- Your Christmas party or annual staff event. You can claim up to £150 per head, for one event – as long as you invite all of your staff.
- Training and development costs. If you’ve had your eye on a workshop, Mastermind or membership, that will help you grow your business – you can claim for all of these, including travel costs, and any other professional subscriptions.
- Computer software – that lasts less than two years. This includes things like Adobe, Microsoft Office etc (the costs of which can quickly stack up!).
- Car mileage @ 45p per mile. If you’ve been to see clients or suppliers; out networking; attended business events; been to meetings…you can claim mileage for them all. Plus any tolls, congestion charges and parking fees.
- Dinner, an overnight stay and breakfast – if a meeting venue is too far from home, to do it in a day.
- The costs of running your own event/s – including entertainment, refreshments and venue hire costs.
- Any pension contributions – to both your own pension, and / or your employee’s pension schemes.
- If your business has made any charity donations – you can claim these in full.
- Life cover. You’ll need to check with your financial advisor, that it’s been set up on a specific allowable plan – but life cover (death in service) can be claimed.
- Branded clothing – like hoodies and t-shirts with your logo on (even if it’s tiny!).
And while we’re at it, let’s talk about the stuff you can’t claim…
- Coffee and / or meals that you take clients out for. Even if you spend all your time discussing work, it’s still not allowed (although you could host an event instead, as per number 6 above).
- A suit for work. Even if you wouldn’t normally wear one, you still can’t claim it.
- Mileage to and from your regular place of work. Only travel outside of this (as per number 4 above).
- Anything else that isn’t actually used in your business. Sorry, but no. And if you use your laptop for personal use too, for example, you should only claim the relevant proportion of that use.
So that’s it! In a nutshell.
But hopefully it’ll help you make sure you’re claiming all the deductible expenses you possibly can.
And if your tax return always comes at a bad time – when cashflow is stupidly tight after Christmas – don’t forget to get your free copy of “4 Ways to Get Off the Financial Rollercoaster” too.
It’s full of simple ways to stabilise your income, feel calm and in control of your finances and start investing in your future!
Until next time,
Claire