Being a business owner is one big learning curve. As your business grows, you learn new things about different aspects of business every day. The financial side of business can be particularly tricky to navigate so the team at GW & Co thought we would share some tips so you can start saving money. Here are our 10 tax deductible purchases or costs for you to save money on in your business:
1. Home Office Expenses
As a new or small business owner you may not have moved to an office yet or during the pandemic you may have moved out of your office space. If you work from home, you may be able to claim a deduction for a portion of your rent or mortgage, utilities, insurance, and other expenses. That is right, anything that is contributing to your business environment, even if it doubles as your home!
2. Vehicle Expenses
If you use your personal vehicle for business purposes the mileage and fuel which you use for business purposes are tax deductible. Our top tip is to keep records of any business trips you take in the vehicle (not including commuting), receipts of fuel purchases and reasons for the business trip.
There are different tax treatments if you are a sole trader compared to that of a limited company so make sure you are claiming the right expenses. If your not sure get in touch.
3. Business Travel Expenses
If you travel for business, you can deduct your transport fares, hotel expenses, congestion charges and tolls and parking fees among other expenses. Ensure you keep all your receipts for your accountant and record the business reasons for your travel. Speak to your accountant if you are unsure if an incurred expense on a business trip is tax deductible.
4. Occasional Staff Meals and Entertainment
By “occasional” we mean not habitual or daily staff meals and entertainment as HMRC does not consider this tax deductible. However, employee Christmas parties, a working lunch or meeting are absolutely tax deductible. You must keep all receipts and record the reasons for the meals or entertainment and the spend must be less than £150 per employee. It must be noted that this does not include client entertainment.
5. Education
You can deduct the cost of business-related educational expenses such as training programmes or courses for your employees. This benefits both the employee who will be better qualified as well as the business who will have a more rounded employee and have saved some money on their tax bill. Moreover, you can also claim the cost of any work-related books or publication subscriptions, but they must be a professional publication. Unfortunately, your lunchtime Hello! is not tax deductible.
6. Professional services
You can deduct the cost of professional services, such as accounting, legal, and consulting services. It should be noted though you cannot claim fees associated with dealing with a tax investigation- an exemption to this rule would be if there was nothing found to be awry during the investigation.
7. Office expenses
For all you stationery addicts out there, there is good news. You can deduct the cost of office supplies and equipment that are necessary for your work such as office chair, printers, stationery, and desks.
8. Marketing and advertising
You can deduct the cost of marketing and advertising expenses including advertising, direct mail, web advertising and sponsorship. So, what are you waiting for? Start getting the word out there about your business!
9. Mobile Phones
This one may surprise you but if you have taken out a contact or bought a mobile phone for work purposes for you or your employees, this is considered a tax-deductible expense.
10. Donations
Has your business donated to any registered charities or amateur sports clubs recently? If so, these are 100% tax free! Make sure to keep records of how much you have donated through the tax year in order to claim your tax relief.
If you are wondering what other areas you and your business could be saving money on, talk to GW&Co Accountants. Our friendly team is made of both experienced and professional accounts who are dedicated to ensuring the financial security and prosperity of their clients. You can contact us via our contact form or if you are in the local area, pop in. We have an open-door policy and are happy to answer any questions you may have.
