Knowing the expenses you can claim as a limited company will help to manage your yearly finances by deducting business costs. This, in turn, will likely lower the amount of tax you pay to HMRC. So, what can limited companies claim as expenses? We’ve got all you need to know below.
What can a limited company claim as expenses?
There are certain business expenditures that limited companies can claim as expenses. But what exactly are they? We’ve listed them below.
Salary and payroll
Employee salaries are an allowable expense that you can claim, along with your own salary (should you choose to take a salary from your business). Remember, however, that you may need to pay National Insurance on your employee’s salaries. We have a complete guide on this so make sure to check it out.
Pensions
As an employer, you must contribute to your employee pension. This cost is 100% tax deductible at a limit of £40,000. We have a guide on auto-enrolment pensions for you to explore here.
Business Insurance
Insurance used strictly for business could be expensed for limited companies. This could be public liability insurance or employers liability, for example.
Marketing
Marketing is an investment into your business, meaning that it can be expensed for limited companies. Of course, this can only be expensed if used for solely business purposes.
Travel expenses
If travel outside of the regular commute to work is necessary for your employees, what you pay for this could be claimed as an expense. This could include parking, public transport, congestion charges and more. Contact our team to find out more about what you can claim as a travel expense.
Equipment
As a limited company, you’ll likely need computers or laptops, printers, desks, Wi-Fi routers and more. If used for purely business expenses, this could likely be an expense.
Eye checks
In a digital age, more and more employees will have to use a computer screen for their jobs. Employees can charge their eye checks to the business which then becomes a business expense and is liable for the business to claim.
Start-up costs
If you’re looking to start your own small business or limited company, some start-up costs, like laptops, software and domain names, could be covered as an expense
What are the rules around claiming expenses as a limited company?
There are rules on what you’re able to claim as a limited company. Before you start claiming business expenses, it’s important to know what you’re able to claim on. We’ve listed them below:
- Expenses can only be claimed for the cost of everyday running of your business. You cannot claim personal expenses for this.
- These expenses must be paid through a business account
- Keep your VAT receipts and further financial records in case you need to justify the claim to HMRC
Knowing what you can claim as expenses can be confusing, so we’re here to help. Contact our team of knowledgeable accountants for further guidance on expenses, tax guidelines and more.
We hope this guide on what limited companies can claim as a business expense was helpful! We have even further accounting guides for small businesses. Make sure to see our article on financial forecasts for small businesses here.