Your guide to knowing what expenses are taxable.

When carrying out your self-assessment, it’s hard to know what can be included as allowable expenses.

Contrary to popular belief, the government wants you to succeed in business and allows you to spend on certain items without paying taxes.

If you were in a muddle following your last self-assessment, our experts have compiled a list of items that may be included in your allowable expenses.

Types of tax-deductible items

In general, tax-deductible items will come under the following categories;

  • Travel
  • Office
  • Stock
  • Marketing
  • Legal & Financial

What are allowable expenses - Fuel Expenses

Travel Costs

Any business-related car or van use may be allowed. Things such as;

  • Vehicle insurance
  • Fuel
  • Hire charges
  • Repairs
  • Servicing and breakdown cover

You cannot claim these charges for general use, such as driving to and from work, but if your vehicle is genuinely used for work purposes, these allowances may be available for you.

It can be hard to calculate your use if your vehicle is used for both personal and business.

Under travel, you may also be able to claim for;

  1. Train
  2. Bus
  3. Plane
  4. Taxi
  5. Hotel rooms
  6. An evening meal during a business trip.

If you are taking a trip for personal and business, calculate how much is used for business and submit it as allowable expenses.

What are allowable expenses? - postage expenses

Office Costs

Many items can be listed under allowable expenses whether you work from premises or home.

It’s a little more complicated when you work from home, which we will explain later.

The types of things you can include are;

  • Stationary
  • Printing costs (including ink)
  • Postage

You can claim for equipment such as computers, printers and software, but this may have to be claimed under your capital allowance if you don’t use cash basis accounting.

With regards to premises, the following may be allowed:

  • Rent
  • Maintenance & Repair
  • Utility bills
  • Property insurance & security.

If you work from home, you may be able to claim a proportion of your utility bills, but you need to calculate what proportion is used for business and what is used personally.

What are allowable expenses? - stock expenses

Stock Costs

Your allowable expenses for stock may include;

  • Stock held
  • Raw materials
  • Costs incurred from producing goods

What are allowable expenses? - marketing expenses

Marketing Costs

Most businesses need to budget for marketing costs and account for this when it comes to allowable expenses. They may cover the following;

  • Newspaper adverts
  • Directory listings
  • Mailshots
  • Free samples
  • Website

You may also be able to claim for subscriptions.

An example of these would be:

  • Membership to trade bodies or professional membership organisations
  • Subscriptions to trade or professional journals

What are allowable expenses? - legal expenses

Legal & Financial Costs

Some fees are essential in business and still covered under allowable expenses.

For example:

  • Accountancy fees
  • Solicitor fees
  • Bank, overdraft and credit card charges (If used for business)
  • Interest on business loans
  • HP interest and leasing payments
  • Business insurance, such as Public Liability Insurance

Other items that may be covered are:

  • Uniform or PPI
  • Staffs salaries
  • Bonuses
  • Pension contributions
  • Benefits
  • Agency Fees
  • Employer NI contributions.

This is an initial guide. More information can be found on the government website.

The most important thing to remember is that you will always need to prove these expenses, so remember to keep a record of all receipts and invoices.

Outsourcing your finances is an excellent option for small business owners who want to save time and money while ensuring accurate financial records.

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