As you may already know, there are some things that you can claim as an expense if you are running your own business. Since you have a business, you are undoubtedly paying tax on whatever profits you make – and if you can claim something as an expense, then the amount of this item can then be removed from your tax return and you can pay a lower amount of tax. If you are aware of what you can claim, then you can definitely save yourself a significant amount in the end. So, the big question is: what can you claim as an expense for your business? Let’s have a look:
Vehicles are a common claim, as most business owners are already aware. If you are making use of a vehicle for your business, you can make a claim on the number of miles you accumulate on your vehicle. For example, if you are using a van, you have the chance to claim about 45 pence per mile (for the 1st 10,000 miles) and so on. Even if you are using a bicycle for your business, you can still claim expenses for it at around 20 pence per mile.
2. Office consumables and equipment
You can also claim items like office consumables, such as paper and ink for your printer, as well as equipment for use in your office. If you have a limited firm or company, then there is a particular way to claim expenses on certain equipment. For instance, if you are using a laptop, you can make it an asset for your company even if you buy it yourself since you are using it for business purposes anyway.
3. Capital allowances
One more thing you can claim is capital allowances. So to what does this refer? This refers to items such as machinery and equipment which have been given as gifts to various charities. It can even include fixtures, for example. Since you cannot really claim these items as expenses, you should claim them as a capital allowance.
4. Rent and utilities
Yet another thing you can claim as an expense is your rent and utilities – that is, if you are working from home. But keep in mind that the total amount on rent which you can claim as an expense will depend on the amount of space you have allotted for your business. If you are using a room in your home as an office, for instance, and it takes up about 10% of your home or flat’s square footage, then you can make a claim for 10% of your rent as a business expense. However, if you work in one room for business during the day and also make use of it to sleep in at night, then you can only claim about 5% of your rent as a business expense.
When it comes to utilities and bills, it works the same way. You have to divide the bills and utilities between those which are used for business purposes and those which aren’t. However, this may entail a more complex computation, so you may just want to settle for a separate telephone and Internet line for your business instead.
Financing experts like Ultimate Finance highly recommend that when you claim something as an expense for your business, make sure you have all the documents to serve as proof. Keep a precise record of your receipts, invoices, and other paperwork and make sure they are properly stored.