Are you claiming all the expenses you’re entitled to?
Monday morning, grab a coffee on the way to the station. Purchase a trade magazine while waiting for a connecting train. Post a letter on the walk into the office.
Work hasn’t even begun and yet you’ve already incurred expenses that can be reclaimed against your tax bill. But how many of these little things do you forget to record?
A few pounds here and there soon add up and in our experience can amount to more than £5000 over the course of the year!
At a4c we have teamed up with Receipt Bank, which allows clients to record expenses on the go. Simply use your smart phone or tablet to photograph the receipt and it magically will appear in Xero for inclusion in your accounts.
Our team of accountants has real-time access to your datas and can advise at the end of the month or quarter how much you need to take from the business to cover any personal costs incurred. These payments are made free from tax and NI.
HMRC has a comprehensive list of acceptable expenses that can be claimed, but here is our reminder of the most common items:
- Business mileage, when using your own vehicle can be reclaimed at 45p for the first 10,000 miles by car (different values for motorbikes / bicycles). Petrol receipts are not needed but you must record the journey postcodes.
- Car parking charges (not fines) can be reclaimed. Receipts should be retained but minor values entered into a parking meter can be claimed without proof.
- Clothing can be reclaimed but ONLY IF used for work and identified with a permanent logo or corporate embroidery. Sorry you can’t claim for that sharp new suit!
- Disability equipment can be claimed, as long as it is also available to all other employees with a disability.
- Food & drink expenses (also known as subsistence) can be claimed for meals taken whilst away from your normal place of work (i.e. your registered office or principal place of work). Receipts must be retained.
- Homeworking can be reclaimed at £6 per week, without proof of costs. If you predominantly work from home then this value can be increased with supported evidence. See our dedicated working from home – expenses guide for more info.
- Incidental expenses incurred when staying away from home can be claimed at £5 per night, without receipts, to cover the cost of laundry, phoning home etc.
- Mobile phone calls can be reclaimed when they appear on an itemized bill. Note that if the phone is owned personally then line rental cannot be reclaimed. (If you have a limited company then it is far better to have the mobile phone tariff through the business than personally).
- Overnight accommodation – if you stay away from home on business then the cost of your hotel or B&B can be reclaimed. Remember to keep the invoice as proof.
- Public transport can be reclaimed for business related trips. Either retain your ticket / receipt or ensure that your Oyster statement details journeys taken, dates and costs.
- Postage costs for business related correspondence.
- Stationery such as envelopes, pens, notepads and other minor office equipment.
- Subscriptions and professional fees are classified as legitimate expenses, HMRC provides a comprehensive list of the approved bodies here https://www.hmrc.gov.uk/list3/index.htm
- Tools can be reimbursed but only if the tools are used for work purposes only.
- Training courses attended and paid for in line with work can be also be reclaimed.
The key point when it comes to claiming an expense is to ensure that the cost was incurred
“wholly, necessarily and exclusively”
in line with business duties and that you have the required proof, such as a receipt or invoice.
A4C – On your side
Supporting you in matters such as expenses and tax efficient ways of taking money from your business is just a small aspect of our service.