Limited company expenses \u2013 the essentials<\/strong><\/h2>\n\n\n\nIf you\u2019ve set up a limited company<\/a>, tax-deductible expenses have to be \u2018wholly and exclusively\u2019 used for your company. If you pay for something that has a combination of business and personal use \u2013 for example you take a work trip abroad and then spend a few extra days on holiday \u2013 only the business part of the cost is tax deductible.<\/p>\n\n\n\nBut as long as an expense is allowable, you can deduct it from your revenue to calculate your taxable profit<\/a>.<\/p>\n\n\n\nGenerally, any money you spend on entertaining clients or gifts is not allowable, even if it\u2019s a genuine business expense.<\/p>\n\n\n\n
It\u2019s important to have a record of all of your limited company expenses, so make sure you keep all of your receipts, invoices, and any other important paperwork.<\/p>\n\n\n\n
Keep in mind that you need to keep records for at least six years after you\u2019ve filed your tax return<\/strong>, as HMRC could investigate at any point within this timeframe.<\/p>\n\n\n\nLooking for a more general guide to small business tax? Head over to our tax hub page<\/a> for more information.<\/p>\n\n\n\n\nRead more:<\/strong> How long to keep tax records<\/a><\/p>\n<\/div>\n\n\n\nLimited company expenses list <\/strong><\/h2>\n\n\n\nMany of the costs involved in setting up your limited company and keeping it running are allowable business expenses:<\/p>\n\n\n\n
\n- startup and office expenses<\/a><\/li>\n\n\n\n
- travel expenses <\/a><\/li>\n\n\n\n
- marketing costs<\/a><\/li>\n\n\n\n
- staff costs<\/a> <\/li>\n\n\n\n
- legal costs<\/a> <\/li>\n\n\n\n
- business insurance <\/a><\/li>\n<\/ul>\n\n\n\n
![\"\"](\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/09\/LimitedCompanyExpenses_LFR_200924.png?w=1024\")
<\/figure>\n\n\n\n\n<\/div>\n\n\n\nStartup and office expenses <\/h3>\n\n\n\n
The fees that you need to pay to get your business off the ground can be expensed. Any professional services you use, equipment you buy, or general fees you incur can be claimed up to seven years before you start trading. <\/p>\n\n\n\n
But when you\u2019re up and running, expenses like rent and utility bills can also be claimed. <\/p>\n\n\n\n
Travel expenses <\/h3>\n\n\n\n
Any travel that\u2019s required for your business can be expensed and it\u2019s not limited to just fuel or ticket prices. You can claim for costs related to: <\/p>\n\n\n\n
\n- hotels<\/li>\n\n\n\n
- food for overnight stays<\/li>\n\n\n\n
- parking <\/li>\n\n\n\n
- toll or congestion charges<\/li>\n\n\n\n
- vehicle insurance<\/a><\/li>\n\n\n\n
- vehicle maintenance and repairs<\/li>\n<\/ul>\n\n\n\n
If you claim for fuel that you\u2019ve paid for with personal cash \u2013 you can claim 45p a mile for the first 10,000 miles and then 25p for every mile after that. For motorcycles, you can only claim 24p a mile. <\/p>\n\n\n\n
Marketing costs<\/h3>\n\n\n\n
Whether it\u2019s an expensive campaign or a monthly subscription, social media ads, or affiliate marketing<\/a> \u2013 most things you spend on advertising your business<\/a> can be counted as a company expense. <\/p>\n\n\n\nStaff costs<\/h3>\n\n\n\n
You can claim for most costs related to your employees. Salaries, uniforms, and equipment can be claimed but also bigger scale events like staff parties can be claimed up to \u00a3150 a person. <\/p>\n\n\n\n
And if you run a business where your staff are required to work for extended periods of time looking at screens, you can expense the cost of eye tests and prescriptions too.<\/p>\n\n\n\n
Legal fees <\/h3>\n\n\n\n
If you hire professionals like lawyers or accountants<\/a>, you can expense the fees you paid. <\/p>\n\n\n\nYou can do this at any stage of your business. Whether you\u2019re getting long-term legal support when establishing your business or consulting with someone for a couple of weeks, both can be counted as a company expense. <\/p>\n\n\n\n
Business insurance <\/h3>\n\n\n\n
Protecting your business with business insurance <\/a>is an important purchase that you can fortunately expense. Any cover applies, whether it\u2019s employers<\/a>\u2019 or public liability<\/a>, tools<\/a>, or contents insurance<\/a>.\u00a0\u00a0<\/p>\n\n\n\nWhat about capital allowances? <\/strong><\/h2>\n\n\n\nIt\u2019s a bit different if you buy an asset for your business. If you buy something that you\u2019re going to keep and use in your business, like a piece of machinery or a work van, you can claim capital allowances<\/a> on your tax return.<\/p>\n\n\n\nThis means that you can deduct the full value of the item from your revenue before tax, using your annual investment allowance (AIA). The AIA has changed several times over the years, but it\u2019s been set to \u00a31 million since January 2019.<\/p>\n\n\n\n
What about limited company expenses and employees?<\/strong><\/h3>\n\n\n\nIf you provide benefits or expenses to your employees (including to yourself as a director), such as travel expenses or health insurance, you may have to tell HMRC and pay tax and National Insurance on them.<\/p>\n\n\n\n
Check the list of employee expenses and benefits<\/a> on the government website for the rules about each type of cost.<\/p>\n\n\n\nIf your employees incur expenses during the course of their work, ask them for receipts so you can reimburse them. You can then include these purchases when calculating your tax deductible expenses.<\/p>\n\n\n\n
Remember that normal commuting costs aren\u2019t tax deductible, but you can claim for other staff travel costs, for example when an employee visits a client or goes to a conference.<\/p>\n\n\n\n
It\u2019s a good idea to have an employee expenses policy in place so that your employees know which expenses you will reimburse, and know how and when they\u2019ll be paid back.<\/p>\n\n\n\n
Tax can be complicated and face fines if you make a mistake on your tax return. Look at the guidelines on the government website<\/a> and look for professional advice from an accountant if you\u2019re not sure.<\/p>\n\n\n\nUseful guides for small businesses<\/strong><\/h3>\n\n\n\n\n- Best accounting software for small businesses<\/a><\/li>\n\n\n\n
- Making Tax Digital \u2013 a simple guide<\/a><\/li>\n\n\n\n
- Changing from sole trader to a limited company<\/a><\/li>\n\n\n\n
- Is public liability insurance tax deductible?<\/a><\/li>\n<\/ul>\n\n\n\n
LIGHTFIELD STUDIOS\/stock.adobe.com<\/em><\/p>\n\n\n\n\n<\/div>\n","protected":false},"excerpt":{"rendered":"Learn what does and doesn\u2019t count as a company expense and how to stay tax compliant.<\/p>\n","protected":false},"author":3,"featured_media":25541,"comment_status":"open","ping_status":"closed","template":"","meta":{"sb_hreflang":"","sb_hreflang_url":"","disable_breadcrumbs":false,"sb_breadcrumbs":[],"sb_reviewed_by":"","sb_review_date":"","sb_enable_content_gating":true,"footnotes":""},"categories":[336,344,110,343],"hidden-category":[],"coauthors":[23],"class_list":["post-1478","knowledge","type-knowledge","status-publish","has-post-thumbnail","hentry","category-business-structure","category-business-tax","category-business-news","category-trades"],"yoast_head":"\n
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But as long as an expense is allowable, you can deduct it from your revenue to calculate your taxable profit<\/a>.<\/p>\n\n\n\n Generally, any money you spend on entertaining clients or gifts is not allowable, even if it\u2019s a genuine business expense.<\/p>\n\n\n\n It\u2019s important to have a record of all of your limited company expenses, so make sure you keep all of your receipts, invoices, and any other important paperwork.<\/p>\n\n\n\n Keep in mind that you need to keep records for at least six years after you\u2019ve filed your tax return<\/strong>, as HMRC could investigate at any point within this timeframe.<\/p>\n\n\n\n Looking for a more general guide to small business tax? Head over to our tax hub page<\/a> for more information.<\/p>\n\n\n\n Read more:<\/strong> How long to keep tax records<\/a><\/p>\n<\/div>\n\n\n\n Many of the costs involved in setting up your limited company and keeping it running are allowable business expenses:<\/p>\n\n\n\n The fees that you need to pay to get your business off the ground can be expensed. Any professional services you use, equipment you buy, or general fees you incur can be claimed up to seven years before you start trading. <\/p>\n\n\n\n But when you\u2019re up and running, expenses like rent and utility bills can also be claimed. <\/p>\n\n\n\n Any travel that\u2019s required for your business can be expensed and it\u2019s not limited to just fuel or ticket prices. You can claim for costs related to: <\/p>\n\n\n\n If you claim for fuel that you\u2019ve paid for with personal cash \u2013 you can claim 45p a mile for the first 10,000 miles and then 25p for every mile after that. For motorcycles, you can only claim 24p a mile. <\/p>\n\n\n\n Whether it\u2019s an expensive campaign or a monthly subscription, social media ads, or affiliate marketing<\/a> \u2013 most things you spend on advertising your business<\/a> can be counted as a company expense. <\/p>\n\n\n\n You can claim for most costs related to your employees. Salaries, uniforms, and equipment can be claimed but also bigger scale events like staff parties can be claimed up to \u00a3150 a person. <\/p>\n\n\n\n And if you run a business where your staff are required to work for extended periods of time looking at screens, you can expense the cost of eye tests and prescriptions too.<\/p>\n\n\n\n If you hire professionals like lawyers or accountants<\/a>, you can expense the fees you paid. <\/p>\n\n\n\n You can do this at any stage of your business. Whether you\u2019re getting long-term legal support when establishing your business or consulting with someone for a couple of weeks, both can be counted as a company expense. <\/p>\n\n\n\n Protecting your business with business insurance <\/a>is an important purchase that you can fortunately expense. Any cover applies, whether it\u2019s employers<\/a>\u2019 or public liability<\/a>, tools<\/a>, or contents insurance<\/a>.\u00a0\u00a0<\/p>\n\n\n\n It\u2019s a bit different if you buy an asset for your business. If you buy something that you\u2019re going to keep and use in your business, like a piece of machinery or a work van, you can claim capital allowances<\/a> on your tax return.<\/p>\n\n\n\n This means that you can deduct the full value of the item from your revenue before tax, using your annual investment allowance (AIA). The AIA has changed several times over the years, but it\u2019s been set to \u00a31 million since January 2019.<\/p>\n\n\n\n If you provide benefits or expenses to your employees (including to yourself as a director), such as travel expenses or health insurance, you may have to tell HMRC and pay tax and National Insurance on them.<\/p>\n\n\n\n Check the list of employee expenses and benefits<\/a> on the government website for the rules about each type of cost.<\/p>\n\n\n\n If your employees incur expenses during the course of their work, ask them for receipts so you can reimburse them. You can then include these purchases when calculating your tax deductible expenses.<\/p>\n\n\n\n Remember that normal commuting costs aren\u2019t tax deductible, but you can claim for other staff travel costs, for example when an employee visits a client or goes to a conference.<\/p>\n\n\n\n It\u2019s a good idea to have an employee expenses policy in place so that your employees know which expenses you will reimburse, and know how and when they\u2019ll be paid back.<\/p>\n\n\n\n Tax can be complicated and face fines if you make a mistake on your tax return. Look at the guidelines on the government website<\/a> and look for professional advice from an accountant if you\u2019re not sure.<\/p>\n\n\n\n LIGHTFIELD STUDIOS\/stock.adobe.com<\/em><\/p>\n\n\n\n Learn what does and doesn\u2019t count as a company expense and how to stay tax compliant.<\/p>\n","protected":false},"author":3,"featured_media":25541,"comment_status":"open","ping_status":"closed","template":"","meta":{"sb_hreflang":"","sb_hreflang_url":"","disable_breadcrumbs":false,"sb_breadcrumbs":[],"sb_reviewed_by":"","sb_review_date":"","sb_enable_content_gating":true,"footnotes":""},"categories":[336,344,110,343],"hidden-category":[],"coauthors":[23],"class_list":["post-1478","knowledge","type-knowledge","status-publish","has-post-thumbnail","hentry","category-business-structure","category-business-tax","category-business-news","category-trades"],"yoast_head":"\nLimited company expenses list <\/strong><\/h2>\n\n\n\n
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<\/figure>\n\n\n\nStartup and office expenses <\/h3>\n\n\n\n
Travel expenses <\/h3>\n\n\n\n
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Marketing costs<\/h3>\n\n\n\n
Staff costs<\/h3>\n\n\n\n
Legal fees <\/h3>\n\n\n\n
Business insurance <\/h3>\n\n\n\n
What about capital allowances? <\/strong><\/h2>\n\n\n\n
What about limited company expenses and employees?<\/strong><\/h3>\n\n\n\n
Useful guides for small businesses<\/strong><\/h3>\n\n\n\n
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