Directors: what expenses can I claim?

Can I claim it or can't I? It's a question many company directors ask about their business expenses. MATT LAURENTI from our accounts department looks at some of the key areas for tax deductibles.

As an owner of a limited company, you'll understand the importance of efficiency within your business. Being tax efficient is no exception. You should be aware of the expenses you can claim through your business to offset against your profits and reduce your tax liability. Here are some examples of expenses that can be put through your company:

Eye tests

If your job demands extensive computer usage, you can claim the cost of eye tests as well as prescription glasses or contact lenses if they are used strictly for work purposes.

Work-from-home allowance

If you work from home, you can claim a flat allowance of £6 a week, which may be useful if you do not have the time to calculate the business usage of your home expenses.

Mileage

A flat rate of 45p per mile can be claimed for journeys which aren't to and from a regular place of work. This is limited to the first 10,000 miles a year, after which the flat rate is reduced to 20p per mile. The mileage can be paid to you from the business for any journeys made to clients and suppliers, as well as any other irregular business miles. You will not be taxed personally on these payments.

Telephone

If you have a mobile solely for your business, the whole amount is an allowable tax expense.

Staff entertainment

If you hold an annual staff party, the whole cost is allowable for tax as long as it does not exceed £150 per head. If the cost exceeds £150 per head, it is still allowable, but the employees/directors would pay the tax individually on this benefit in kind.

It is important that you maintain sufficient documentation of these expenses, as HMRC may investigate your records. Expenses that are not wholly related to business should not be expensed through your company. If you have doubts over the tax treatment of your expenses, you should speak to your accountant to ensure that all tax-sensitive items are treated appropriately. You can contact us today on 0115 955 5500 or email enquiries@pagekirk.co.uk.