Insights | Accounting, Expenses, Limited Company, Questions, Stretford

Allowable expenses for Limited Companies

Do you know what expenses your Limited Company can claim? Here is our guide.

From telephone and internet to computer software and travelling costs, as a Limited Company owner, you can claim Tax Relief for business expenses, helping to keep your business more tax efficient.

Below, we look at the allowable expenses your Limited Company can claim, how you can claim and remain HMRC compliant.

HMRC fundamental rules

You would need to follow HMRC fundamental rules:

1. Expenses must be wholly and exclusively incurred during the everyday running of your business.
2. Expenses with dual purpose. For example, if you decide to extend a business visit abroad for leisure, you can only claim for the business days, not the additional leisure days.
3. Most expenses can be offset against your company’s Corporation Tax Liability – some exceptions can include business entertainment.
4. HMRC require businesses to maintain an accurate record of expenses and running costs, including VAT receipts, just in case HMRC query about your business expenses claims.

Limited company expenses that you can claim

Business Insurance – as long as the insurance is strictly for business purposes, in this instance this is an allowable expense for the Limited Company.

Accommodation expense – if you are on a business trip or travelling to get to a client’s premises then that is claimable as an expense. You could also claim for food and drink.

Bank Charges – bank fees charged by your bank are allowable as an expense. This can also include interest and other related expenses.

Telephone Bills – work phones and internet subscriptions can be claimed through a Limited Company. 

Staff Party expenses – Christmas party or summer staff event, the cost of entertaining your staff can be claimed as a business expense as it is an annual event, open to all staff members and the cost is less than £150 per head.

Professional Subscriptions – subscriptions that are necessary for the Limited Company can be claimed as business expenses. For example, if you are in the medical sector and payments are made to medical institutions, these can be claimed.

Travelling Costs – expenses incurred whilst travelling on behalf of the Limited Company can be claimed as an expense. Where you have used your personal car for business use, you are entitled to claim business mileage. As well as mileage other travelling expenses that can be claimed include toll fees, parking, congestion fees, public transport trains/buses/taxis, van insurance, vehicle repairs, etc. 

Advertising and Marketing Cost – incurred in recruiting staff or generating sales can also be claimed as allowable business expenses.

Summary

Claiming the right business expenses can make a significant difference to your Corporation Tax bill. Accounting Solutions Manchester helps limited companies maximise legitimate tax relief while ensuring every claim meets HMRC’s requirements. Reduce tax, increase profit, and save time. Call us today on 0161 879 7175 for a free, no-obligation consultation.