What Expenses Can I Claim as a Ltd Company | Allowable Business Expenses EXPLAINED UK!

What are allowable business expenses and what expenses can you claim as a LTD company? In this video, I explain how limited company expenses can be used for corporation tax relief.

Corporation tax avoidance is 100% legal, the easiest way of reducing corporation tax is via allowable business expenses. The HMRC states that these tax deductible expenses should be “necessary, wholly and exclusively” for the business. However, it is now always that clear cut - for example, a mobile phone is a 100% tax deductible expense and can also be used for personal usage.

There are two types of allowable business expenses:
• Tax Deductible Expenses - these can be used to reduce your corporation tax bill e.g. office rent
• Non-Tax Deductible Expenses - these do not offer any corporation tax relief e.g. entertaining clients

Some business expenses are classed as capital expenditure (usually larger purchases that will be used for many years) and managed via capital allowances instead.

Up to 7 years of pre-trading expenses can be claimed so make sure you keep invoices and proof of any purchases you make before you start your company.

Tax deductible expenses that you should be able to claim through a Ltd business:

• Office Rent (inc. Business Rates) & Utility Bills or Use of Home Office (Flat Rate Method)
• Office Equipment - Computer, Furniture, Printer, Stationery etc.
• Salaries
• Mobile Phone (one per employee)
• Mileage Allowance Payments (keep mileage log)
• Travel, Accommodation & Subsistence inc. Food (away from the permanent office)
• Entertainment & Christmas Party (up to £150 per employee)
• Accountancy Fees, Banking Fees, Business Insurance
• Marketing
• Clothing (uniforms, branded clothing, and safety equipment)
• P11D Staff Benefits - Company Car, Medical Insurance etc.
• Pension Contributions

Do you have any tips for tax deductible business expenses? Let me know in the comments!