expenses which have a personal and business element, are not generally allowable. However, expenses which have a ‘ duality of purpose ’, i.e. Basically, anything that is needed to keep your business running is considered an allowable expense.Īllowable expenses will reduce your businesses profits, which in turn reduces the amount you pay for your Corporation tax bill. These include things like business-related travel expenses, office supplies and equipment, and employee salaries. To recap, allowable business expenses are defined by HMRC as those that are “wholly necessary and ordinary” for conducting business. What are allowable business expenses for limited companies? This will give an indication of the types of things that can and can’t be claimed, but it’s important to remember that this is not an exhaustive list and does not cover every single business expense – it’s just a pretty good start! To make business owners lives a little easier, we’ve compiled a list of limited company expenses that business owners may be able to claim for their organisation. However, there are things to be aware of that HMRC absolutely refutes as an allowable business expense, even if a limited company owner might see them as a necessity, like any childcare fees paid while attending a meeting. Limited company owners often face confusion when it comes to knowing their allowable business expenses as there are grey areas between what can and can’t be claimed for tax relief.Īs a loose rule of thumb, the cost of any goods or services which have been used for business purposes will be classed as tax deductible expenses and will reduce the business profits meaning less tax needs to be paid. Many business owners know their business expenses, but in the same breath, many are also unsure of the exact list of allowable expenses.
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