Expenses claims help many people lower their costs, so knowing where you can claim can help even more.
Any business that make profits will pay taxes on them. When a business declares their expenses, the amount of the claims are removed, which in turn allows businesses to lower how much tax they pay.
As a business owner or contractor, being aware of what can be claimed for can save you a pretty penny. Let’s take a look at what can be claimed…
If you’re using your vehicle on business grounds, then look into claiming on the mileage you build up. You can claim 45p/mile on the first 10,000 miles, and 25p/mile afterwards, if you’re travelling by car/van. For motorcycles, there’s a flat rate of 24p/mile that can be claimed. Now, here’s one you may not know about: for all you cycling enthusiasts, you can claim 20p/mile!
Essential items such as printer ink are obviously claimable. However, if you are a running a limited company, you can claim on even more items. Items such as laptops can be bought through the company, making it a company asset, and therefore claimable. Another bonus of this, is that the money claimed can be paid back through the company tax free!
Working from Home?
By working from home, you are entitled to reclaim some of your costs on your bills, rent/mortgage. There are some constraints on this, but by being aware of what can/cannot be done, you can definitely save a penny or two. This area is quite extensive, and potentially complicated. Hence, we’ve simplified this into a separate blog post, which you can read here.
Some items that are essential cannot be claimed through expenses, and must be claimed as a capital allowance. Large gifts to charity or machinery that is crucial for the running of your business are examples where they should be claimed as capital allowance. Feel free to get in touch to find out more about this, as many people fall down on this issue.
This is just a summary of what you should be aware of when going through your expenses claims. For the full list on what can be claimed, take a look on the HMRC’s website.
Proof of purchase is essential when doing your claims. Therefore, all receipts, invoices and the like should be kept safely, and in order.
Not only is this necessary for your immediate claims, but HMRC can actually ask for proof of your expenses up to six years after the initial claim. Imagine the scenario where you make your claim, get the money back, and then you’re asked to dig out your receipts from six years ago. If you can’t come up with them, then HMRC are entitled to ask for the money back. Keep them safe!
We’ll be posting another blog on this subject with further important details. If you need more information in the meantime, don’t hesitate to get in touch.