EXPENSES
Our table below gives information on expenses typically claimed by freelance and subcontractors. The list is not exhaustive and further detailed advice is available if required.
| Accountancy | Our fees for services carried out on behalf of your business are allowable for tax. Our fee for preparing your personal self assessment tax return, if paid for by the company should be shown on your P11D at the end of the tax year. |
| Accommodation | Accommodation whilst working away from home is allowable for tax if "wholly and necessarily" for business use. Any personal element is not allowable. The accommodation should be of an "appropriate standard". You are also entitled to claim an additional £5 cost for "incidentals" (£10 if abroad). "Accommodation" includes hotels, B & B or renting a house. |
| Advertising or Marketing | Costs of advertising or marketing your business are allowable for tax relief. |
| Air fares | Reasonable air fares i.e. not first class, are allowable for tax relief. |
| Annual return filing fee | Allowable for tax relief. |
| Bad debts | Once a trade debt becomes irrecoverable it becomes allowable for tax relief. |
| Bank charges | Allowable for tax relief. |
| Bicycles | If you use a privately owned bicycle to travel to and from work then you are entitled to be reimbursed 20p per business mile made tax fee. Your company may purchase a bicycle and safety equipment for your use, so long as more than half of the use of the bicycle is business related. The bicycle remains the property of the company and tax relief is available on its original cost over a number of years through capital allowances. |
| Broadband | If the agreement is made in the name of the company, and there is no significant private use, then the expense is allowable for tax relief. If you already have broadband at home prior to commencing work then the cost is not allowable. |
| Car hire | Fully allowable if no private use. This is reduced accordingly if there is private use. |
| Company formation fees | Disallowable. |
| Childcare vouchers | Under the Government childcare voucher scheme the costs are allowable for tax relief and savings in PAYE/NI are available. Please contact the office for further information. |
| Christmas party | Costs of up to £150 per head are allowable for tax relief per person. The party has to be open to all employees. |
| Christmas present | To be allowable you need at least two employees in addition to the director. Any gift in excess of £50 should be reported as a benefit on your P11D. Gifts of alcohol, food or tobacco are wholly disallowable. |
| Charitable donations | Donations are allowable as long as the company remains in profit after the donation is made. |
| Gifts | Allowable if the value is less than £50 to any person/company during the year and the gift bears the company name as advertising. Food, alcohol and tobacco are wholly disallowable. |
| Protective clothing | The clothing must be solely for business use e.g. overalls, safety clothing. |
| IT equipment and software | Tax relief is available on IT equipment and software bought for business use. |
| Training | Tax relief is available if the training is to improve your knowledge or skills relevant to your business. |
| Director’s salary | Your director’s salary is allowable for tax relief. |
| Entertaining | No tax relief is available on entertaining costs. |
| Subscriptions | Subscriptions paid which are related to your business and approved by HMRC are allowable for tax relief. |
| Eye test | The cost of an eye test, if you work at a computer screen, is allowable. |
| Health checks | Annual health screens are allowable. |
| Hire purchase | The interest element of HP repayments are allowable for tax relief. |
| Insurance | The costs of business related insurances e.g. employees, public liability and professional indemnity are allowable. Please contact the office if you require any further information on insurances. |
| Leasing equipment | Leasing of business equipment is allowable. |
| Legal fees | Legal fees in defense of your trade for any reason are allowable. When your business has breached the law no tax relief is allowable on any penalties or fines e.g. late filing penalties. |
| Trade journals, reference books | If the journals etc are necessary for the business and there is no private element then tax relief is available. |
| Medical care | If working abroad medical insurance and medical care is allowable for tax relief. |
| Mileage | Mileage may be reimbursed at 45p per business mile for the first 10,000 miles and 25p thereafter. This is allowable for travelling to and from the same place of work for the first two years only. No claim may be made after this period. |
| Mobile telephones | Mobiles under contract via your business are allowable for tax relief. Insignificant private use does not invalidate this tax relief. Both the cost of the mobile and calls are allowable. |
| Cars | Generally, cars are not tax beneficial if owned by the company. The personal car benefit on the director often outweighs the tax relief to the company. This is however not always the case and each case should be considered separately. If you would like detailed information on car and fuel benefits please contact the office. |
| Vans | The company receives tax relief on the purchase or lease of a van. The driver receives a £3,000 benefit in kind with an extra £550 where fuel for private use is provided. However there is no benefit in kind on the driver where there is restricted private use i.e. rarely used privately. |
| Use of home as office | £3 per week is allowed by H.M. Revenue and Customs. |
| Rent of office/storage | Rental costs are allowable. |
| Parking | Parking costs are allowable. If no receipts are kept a maximum of £5 is allowable per day. |
| Tunnel/toll fees | Allowable if for business travel. |
| Pensions | Pension costs paid by the company into an employee’s pension scheme are allowable. |
| Postage, printing and stationery | All costs are allowable. |
| Sponsorship | Allowable for tax relief. |
| Subsistence | If you leave home before 6am (and this is unusual e.g. you do not always work early morning shifts) you may claim £5 for breakfast.
If working away from home/normal place of work for a period of at least 5 hours then £5 may be claimed. If this period is extended to 10 hours or more then £10 may be claimed. If you have to work after 8pm when working away you may claim £15 for meals, assuming that it is not your normal finishing time. If your actual expenditure is less then the above allowances then the lower amount paid should be claimed. If your expenditure exceeds the above rates then only the day rates may be claimed. |
| Taxi fares | Taxi fares for business use are allowable. |
| PCG membership | The cost of PCG membership is not allowable for tax relief. |
