Claiming business expenses can be complicated but allows you to reclaim some or all of your expenditure. In this guide, we will explain some of the most common costs that can be claimed.
The Common costs include general business expenses, mileage, subsistence, home office, clothing and accommodation.
We have produced a free Excel business expense template, which you can download and use. Full instructions are found on this website. There are two different templates for VAT and non-VAT.
Claiming Business Expenses Software
The easiest way to claim expenses is to use accounting software. QuickBooks has an app that will track business mileage and allows you to photo of receipts directly to the software.Visit QuickBooks
What Business Expenses you can Claim
If your work includes having to stay away from home, you can claim accommodation. The expense must be reasonable and not booking the top hotels.
Accountancy and Bookkeeping
You can claim accountancy and bookkeeping fees, as long as they are purely for the business. You can’t claim for producing your HMRC self-assessment, but you can claim for preparing the accounts.
If you use your own vehicle for business travel, you can claim an amount per mile, 45p for the first 10,000 miles and 25p per mile over 10,000 miles. You cannot claim any mileage between home and work. When you use this rate, you cannot claim any other expenses concerning your vehicle, e.g. road tax, repairs, and insurance.
If your vehicle is mainly used for business use, you can claim all your fuel, insurance, repairs and road tax. You must make sure that you deduct any private use. It can be completed by calculating the percentage of private travel and calculating the figure.
An example of business mileage is that a small business owner spends £250 a month on their petrol and running costs. They travel 500 miles in total, but 50 of these are private miles. 10% is classed as private use £250 – £25 = £225 can be claimed.
To record mileage use either an accounting software package, the expense template below or our mileage log. An example of the small business mileage log as below.
If you have a company car or van, the rules are more complicated, and you will need to find out further information on www.gov.uk
You can claim for specialist clothing required for the business, including steel-capped shoes, safety wear and uniforms. You can not claim for general clothes to wear for work.
General Business Expenses
Most general office expenses can be reclaimed including stationery, phone, ink, printing, advertising, insurance, rent, utilities and purchasing goods for resale.
As a sole trader, you can’t claim a personal pension scheme. A Limited company can set up a business pension scheme and contribute to staff pension.
Travel and Subsistence
As well as business mileage you can also claim for train, bus, tolls and paring if they are business-related. You can’t claim for your normal commute to work.
Subsistence is the tax definition of food and drink. You can claim subsistence is you are away from your normal place of work. The rates are as follows and the maximum amount:
- £5 if working away for at least 5 hours
- £10 if working away for at least 10 hours
- £25 if working away for at least 15 hours and late after 8pm
To claim you must have incurred a cost.
Claiming Business Expenses for Working from Home
If you work from home, you can claim either a fixed rate or a percentage of your costs.
The fixed rate is calculated on the number of hours worked at home per month.
25 to 50 hours = £10 per month
51 to 100 hours = £18 per month
101 or more hours = £26 per month
An example of a fixed expense is that you work 70 hours at home per month; you can, therefore, claim 12 x £18 equals £216 per year.
If you claim a proportion of your costs, you will need to include heating, electricity: council tax, mortgage interest, rent, and internet. Then calculate the proportion that relates to your business.
Example: 1 room of a 5-room house is used for business three days per week. The total house expense is £200 per month. £200 divided by 5 rooms is £40. It is only used for 3 days per week, therefore claim 3/7 of £40, which equals £17.14 for 3 days.
Business Expense Template
We have developed two Excel templates to record your Expenses. There are VAT and non-VAT options; both allow you to enter the mileage and all other payments that have been made. The figures can then be posted to the accounts, and you can claim back the value of the expenses.
Further Advice for Claiming Business Expenses
Claiming business expenses can be complicated, the above is only a guideline, and full details can be found on www.gov.uk
If you are unsure of what expenses you can claim, check with your accountant.
Return from claiming business expenses to Excel bookkeeping templates.