3 Business Expenses Not To Miss
As an owner managed business, there are certain costs that you will inevitably incur whilst running your business. If you specifically need to incur a cost to run your business, it will most likely be allowable. Here we highlight the three most common things missed off of client expenses for income tax and a corporation tax purposes.
Mobile phone costs
Most people have a mobile phone nowadays. And it would be fair to say that you could not run a business without the use of a phone. Therefore you should be including your mobile phone costs in your business, based on a percentage of the usage relating to your business. If you are a limited company and the phone contract is with the company, you can claim the full amount.
Use of home
If you do not have an office and work from home you should be claiming some use of home costs. The recommended HMRC amounts are not particularly high but you can prepare an alternative calculation based on your actual use of home on a pro-rata basis, and this would be based on the time spent in the space and the amount of space in the property used. But do be careful that you do not create a capital gains tax implication and do take advice on this if you do want to opt for a percentage of your costs rather than the HMRC recommended rates.
If you use your car for your business you can claim your business mileage. As a sole trader it may be more beneficial to claim the actual costs of running your car for your business but a simplified option would be to claim mileage on the basis of 45p per mile for the first 10,000 miles, followed by 25p for each business mile thereafter. As a company you would need to be mindful of the benefit in kind rules if the company was to own the car, so mileage is a simplified option and simple to calculate.
FUSE is an independent Chartered Certified firm of accountants and tax advisors based in Highgate Village, North London. We provide a dynamic range of services to clients working in property, media, entertainment and professional services. Our clients vary in size from self employed sole traders, small enterprises and medium size businesses. We believe that comprehensive financial planning and sound business financial advice are the keys to growth and profitability.