KNOWLEDGE BASE

Claiming expenses

Tuesday, May 3, 2016

Understanding exactly what you can and can’t claim for can be a tricky business. Our useful guide aims to shed some light on allowable business expenses. For instance, if you’re buying a new laptop, can you claim for that?

Guidance

There are some general rules that you’ll need to abide by when claiming business expenses.

  • All expense claims should relate 100% to your business. The official definition is that business expenses should be incurred ‘wholly, exclusively and necessarily’ in the performance of your business duties.
  • You must not claim travel and subsistence for any one place you have worked, or know you will work for more than 2 years
  • Receipts for all expenses should be kept for a minimum of 6 years in case of HMRC investigation
  • New legislation introduced in April 2016 means that certain business expenses may not be allowed if your work assignment is under IR35. Affected expenses include:
    • Accommodation
    • Business mileage
    • Subsistence
    • Travel

With those guidelines out of the way, here’s our rundown of the expenses you can claim in the course of running your business.

Accommodation

There are several categories for submitting accommodation costs;

  • All hotel/B&B claims must be supported by the original receipt
  • Renting accommodation? You’ll need to submit the original, signed rental agreement, which should be in the name of your business
  • Rental claims must meet HMRC Dual Purpose rules, which state that you should have a main residence, and the second property is being rented for the sole purpose of your contract

Bicycle

  • You may be able to claim for the cost of a bicycle through the “cycle to work” scheme.

Business mileage

If your assignment is outside of IR35 you can claim 45p per mile for the first 10,000 business miles you drive in your car each year and then 25p per mile after that.

Allowable business mileage includes travelling between sites and to and from temporary locations. You’ll need to retain your fuel receipts.

Childcare

You can claim up to £55 per week, per employee, for fees paid to a registered childminder. This should be paid from your company’s bank account.

Clothing

Special clothing and protective equipment (PPE) can be claimed as a business expense.

Computers and office equipment

The costs of hardware, software and other office equipment essential to

Donations

You may claim for donations made to a registered, HMRC-approved, charity.

Eye tests

You can claim for the cost of an eye test, with a valid receipt. You can also claim for glasses but only if they are prescribed for VDU use only. This should be stated on the optician’s receipt.

Home office expenses

You can claim a fixed rate of £4 per week for costs associated with using your home as an office, without the need for a receipt. Claims above this amount are possible but require receipts.

Life insurance

It is possible to claim back the cost of some life insurance policies through your company. Our advisors would be happy to provide you with guidance on how to set this up.

Marketing

You can claim expenses relating to the promotion of your business, e.g advertising costs.

Other travel costs

Sundry travel expenses such as toll fees and congestion charges incurred as part of your business activities can be claimed for. Motoring fines cannot be claimed back.

Parking

Parking can be claimed for, if it is supported by an original receipt.

Pension contributions

If you make pension contributions on behalf of your employees, you can claim this as a business expense.

Postage

Any business-related post can be claimed for, as long as original receipts are provided.

Staff functions

You can claim back any costs relating to an annual staff event, as long as you have receipts and the costs do not exceed £150 for each employee.

Stationery

Office consumables such as paper, pens and stationery are classed as a valid business expense. The costs should be at a reasonable level and you’ll need original receipts.

Subsistence

You can claim reasonable costs for food and drink bought while working at a temporary location, as long as you have valid receipts.

Telephone and broadband

The cost of a home phone and broadband package is an allowable business expense as long as the contract is in your company’s name. You can also claim for business calls made on your landline.

Text books

You can claim a reasonable amount for the cost of required business text books and manuals, as long as you keep the receipts.

Training

Training or tuition relating to your current job can be claimed. If the training is not linked to your existing role, it cannot be treated as a valid business expense.

Travel fares

You can claim for business journeys taken by air, rail, bus and taxi. Fare costs to and from your home and temporary place of work can be claimed with a valid receipt. Original tickets and online receipts are acceptable for flights.

How CharterRED can help

Our expert team are on hand to provide guidance on your business claims, and you can use our online portal to keep track of your expenses and receipts.

Need more information?

For further information on allowable business expenses, please get in touch.

  • Contact us

    To arrange an informal chat with one of our expert advisors, please call us on 0114 478 0559, or enter your email address below.