by Nick Robinson | Mar 03, 2015 | Accounting, Bookkeeping, Business
Running a successful business involves being clever with expenses. It is an easy way to stay tax efficient and it reduces your profit whilst also reducing your Corporation Tax payments.
Expenses can be paid from a company account directly or reimbursed when paid by you but remember it is vital to record each time you reimburse yourself.
If you are a sole trader then expenses are claimed when a Self Assessment is filed which is done at the beginning of each year. All expenses incurred that relate to the business directly can be claimed back.
Making A Claim
When it comes to business mileage it is possible to claim tax relief if your own car has been used or if you purchase fuel when using a company car. It is important to record you mileage as it is crucial to having your claim validated by HMRC.
Office supplies are crucial for any business and if it is necessary then the company will receive tax relief so ensure that everything is recorded. Keeping receipts for every purchase is the best way to keep a record but remember that they must be kept for six years after your returns have been filed as HMRC could choose to investigate at any point. Storing receipts somewhere safe is the obvious approach but it helps if they can be backed up digitally as they are prone to fading over time.
Business trip expenses covers all costs incurred which could be anything from hotels to food to training, however, it has to be within reason. When working away, should it be for longer than five hours it is possible to claim lunch and if this extends to ten hours dinner can also be claimed. As always, best practice is to log all expenses as HMRC may decide to investigate. HMRC also take a special note of taxi use should the appear unnecessary.