There are loads of expenses that HMRC allows you to claim as a limited company – and you probably already know about a few of them like office supplies, tools, and business car mileage.īut that’s just the tip of the iceberg. So now that we know what allowable expenses are, let’s talk about which expenses you should be claiming.
But you absolutely must keep records of all your expenses, and you’ve got to show those records to HMRC if they ever ask you for proof of expenses. Generally speaking, you don’t have to send in records and receipts with your tax returns each year. That means HMRC would only ask you to pay tax on £40,000.īut listen up close, guys, because there are still important rules you need to follow when claiming expenses. For example, let’s say your company made £50,000 last year but you spent £10,000 on allowable expenses. Translation: if you’ve spent money on an allowable expense, you don’t have to pay tax on that money. Allowable expenses are all tax-deductible, which means that HMRC allows you to offset those expenses against your annual tax bill. Now, before we dive into what you can claim, let’s explain what we mean by allowable expenses.Īllowable expenses are essential business costs that you need to make in order to keep your company up and running.
Today I want to walk you through how you can lower your company’s tax bill with some lesser-known allowable expenses that your company is probably not claiming. So if you want to keep up-to-date with our insights, advice, and inspiration – then hit that subscribe button. Hi there, Nicholas Campion here from 1 st Formations and welcome to another episode of Whiteboard Thursday, where we take a look at all aspects of running a limited company in the UK. In this episode of Whiteboard Thursday, Nicholas Campion walks you through 13 allowable expenses you are probably not claiming, such as bicycle mileage, mobile phones, client entertainment, and your Christmas Party. Want to cut your limited company’s tax bill? Like most of us, you’ll probably be worried you are paying too much tax, while other companies are saving thousands!
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