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What can I claim as a business expense?

Many people ask me the above question so I thought it would be helpful if I wrote a blog on the subject…

It can very much depend on the type of business and the expenditure itself, however, the underlying theme is the same.

Three important questions to ask:

  1. Has this expenditure contributed to my business in any way?

  2. Have I received any income directly from this expense?

  3. Would I have paid for this, if I had NOT been running a business e.g. phone, internet, council tax, rent?

If the expense has contributed to your business then you can claim either the full amount or a proportion of it. To determine the percentage that can be claimed, ask yourself honestly what proportion of the service/product you are paying for is used in your business, and how much is used personally.

Things that many people forget about:

  • Training

  • Travel

  • Subsistence (see next week’s blog for more on this though!)

  • Percentage of home premise expense (gas, electricity)*

* For example, your home is an expense that you would have paid anyway BUT if you work from home and your gas and electricity has increased as a result of being in the house all day, then the increased cost can be claimed. However, it can often be easier to take the simplified expense approach. See HMRC’s website for more details: HMRC – Simplified Expenses

If in doubt, always ask the three questions above.

© Helen Monaghan

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