AIMS Accountants for Business
AIMS Accountants for Business
Being on top of your money as a small business is everything, especially at the beginning when cashflow might be tight. We thought it would be useful to look at 4 lesser known tax deductions that will help you and your business save money, but that you might not be aware of at the moment! You can find more ways to reduce your Corporation Tax bill on the government website.
If you run your business from your home, you can probably claim a proportionate proportion of household bills as expenses. This includes heating, electricity, Council Tax, mortgage interest or rent and internet and telephone use. You can only claim for these in the part of your house used for work and the amount of time you spend working from home must be factored in. Remember, this is for self-employed people, companies would be charged differently.
For example, if you have 8 rooms in your house and only use 2 for work and you pay an electricity bill of £1000 for the year, you can probably claim allowable expenses on £250 – (£1000/8)2 = £250.
According to tax legislation, tax relief is allowable for training expenses only when the training is used for updating existing business or professional knowledge. If you buy training courses to help you expand into new areas, you cannot claim tax relief.
Don’t forget to claim tax relief for travel and subsistence when travelling to training courses and accommodation expenses if you have to stay overnight!
Unfortunately, interest costs on personal overdrafts are not an allowable business expense, but interest on overdrawn business accounts is. Speak to your accountant first, but you might want to think about borrowing within the business rather than personally.
Remember that the cost of staff parties and any other form of staff entertaining is usually deductible. Businesses will often use this for their Christmas parties.
You have £150 a head to play with over the year, so don’t go too large!
These are just a few tips around claiming allowable expenses on things you may not otherwise have known about. As ever, things are not always as straight forward as they seem so if you think you qualify for any of these, chat to your local AIMS Accountant first! You can find your nearest one here.