What expenses you can claim for, and what you can’t

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In business, there are some expenditures that you can claim for, whether you are employed or self-employed, which these generally incurred during the performance of your duties.

However, not all costs are allowable by HMRC and there are different rules for claiming on what you are owed.

What can employees claim as an expense?

If you are employed and pay for a subscription or membership fee to a professional body, and need to provide this so that you can carry out your employment duties, you may be able to claim back the costs incurred.

Any travelling that is to carry out employment duties, other than a regular commute to and from work, may also be claimed back from the employer at the rate of 45p a mile for the first 10,000 miles. If less is paid by the employer, you can claim the difference as an expense. For claims for 10,000 miles and over, 25p is claimed for each mile.

You can also claim for the use of protective clothing or uniforms at work, although the items must display the company logo. Working from home can also be claimed for, although there are different ways to calculate expenses.

What can be claimed when you are self-employed?

If you run your business from home, you can claim an allowance of £4 a week to cover the costs incurred. You could calculate the actual expenditure of working where you live by separating personal and business use, but this is more complicated.

General costs of running a company can be claimed for, including telephone calls, the Internet and associated fees. You can also put a claim in for printers, fax machines and computers, although any personal use should be deducted. Advertising fees, payments to an accountancy outsourcing service and bank charges can all be claimed as deductible expenses as well.

What can’t be claimed for?

You cannot claim for any clothing worn for work that isn’t a specialist garment. As such, if it doesn’t have a company logo or can be worn as typical everyday clothing, it generally can’t be claimed for. For example, you can claim for a protective jacket and boots with steel toe caps, but not a suit, which could be worn in circumstances other than work.

Entertaining is not allowable as a business expense either, even if you are genuinely treating clients to lunch or another event.

Expenses can be a complex area of tax law, so to be sure that you are claiming all the expenses you are eligible for, you should contact us today.