Business Expenses Advice for Small Businesses

There are certain times of the year when business expense claims become more common. Christmas is one such time. But what can be claimed as an expense? Are there different types of expenses? Follow this guide and you should not go far wrong:

What are Non-Taxable Expenses?
A non taxable expense is something that you or an employee buys that is for business use only. Often known as allowable expenses, these can be deducted from your end of year tax bill. But working out what can be claimed as a non taxable expense can be difficult. As a rough rule, things such as travel costs for business purposes, general running costs such as electric and phone bills, as well as premises costs such as renting an office can be claimed back. This is however by no means an exhaustive list, and from time to time it may become difficult to know whether one thing or another could be claimed back as an expense.

The best idea is to invest in a professional bookkeeper so they can keep a detailed record of all expenses you accumulate throughout the year. This way you will have a tidy and comprehensive list to present to your accountant at the end of the tax year, and then they can work out what can be reclaimed or discarded.

What can't I claim as Expenses?
The basic rule is that you cannot claim anything that is for personal use. This means that you cannot claim your phone bill as expenses if you have used it for personal reasons. You cannot claim travel expenses on your journey to or from work, but you can claim back expenses spent visiting clients for example. Again, it is best to check with a professional to make sure you have the right to claim back what you think you are due.

Do I need to Keep a Record?
It is very important that a detailed record of all of your expenses is kept throughout the year and that it is kept up to date at all times. Everything must be recorded along with receipts and the relevant documents that prove the expense was business related.

HMRC can be very strict so it is best to use an outsourced bookkeeper to keep all of these records for you. They will know how to collate and present your expenses in a professional way and will offer you advice on what you can or cannot claim.
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