I am running my company for more more than a year now and I only learn a couple of weeks ago some useful tricks about “claiming expenses through your limited company”. I am always very careful about what put as an expense or not and recently I went to a very interesting talk about taxes for small business in UK. The law is not always very clear about those and there is things you need to know.
Claim expense – occasional working from home
“From April 2012 HMRC allow a flat rate claim of £4 per week for incidental home expenses – in other words, if you primarily work at your client’s site and only use your home office for managing your business you can claim up to £208 per year. So if you simply use your PC at home to tidy up a few loose ends and you do not qualify as having a ‘dedicated home office’ that you conduct business from, you should stick to claiming this £208″.
Clearly there is an important lesson here for us: claim £208 a year, that is the minimum we are all entitled from. I am sure you do your accounting of business paper at home.
You can claim more if you work full time from home. In the law it’s all related with the rooms you use in your home and the one you use for your business activity but once again it’s a blur area. You “should” have a dedicated office room you are able to claim as business expense. But you can work in nearly all room. Sometimes from your kitchen table, then in you living room, in your bedroom before to sleep. So it’s very difficult to estimate how much pourcentage you use for your business in reality. Don’t be afraid of the taxman and don’t low down your estimate. Think about how much it will cost you if you were renting a separate office just for your business.
Claim expense – Phone
You can buy your phone through your company. And make the company pay for your contract too.
“If the contract is in an individuals name and not the company, then only the calls made related to the business may be claimed”
In reality it’s not really possible to make the difference between “business” and “personal” call. So you can put it on your expenses. If you were an employee of a company, the company will provide you a telephone with a contract and they will claim it all, they won’t check who you called.
Claim expense – Travel card
If you use the card for personal travel then the personal benefit from your company may result in additional tax / national insurance being due. If the cost of the business travel had been paid for by purchasing individual tickets, exceeds the value of the travel card purchase, then the travel card can be used for personal travel and no additional tax / national insurance will be due.
From HMRC website: “If the cost of the travel card provided by the employer is matched or exceeded by the individual cost of business travel by the employee, which gives rise to a matching deduction under s362, any additional use for private purposes does not result in any additional cost to the employer. Consequently there is no chargeable benefit for the employee.”
Claim expense – Annual event / Christmas party
An annual event can be claimed such as a Christmas party or summer barbeque: it need to be open to all employee and The cost per head does not exceed £150 (including VAT)
Claim expense – Food, subsistence
Up to £5.00 may be claimed every day, where the contractor has been away from home for a period of at least five hours and has incurred the cost of a meal
Claim expense – and much more
Think about training, networking event, business meal with client or potential clients.
BONUS TIPS: Save on everything you buy online
That’s something not to link to your company ;)
Get some money back on your online expenses by using cashback websites (or apps).
There is a few online but I recommend TOPCASHBACK.
HOW IT WORK: it’s just an affiliation links system.
1) register quickly, 2) click on the links from the website before to buy on your marchant website. Those links are tracking links, so the cashback website earn money because it sent you to the marchant, in exchange 3) it gives you some money back. Easy!
A few example of where to use cashback online:
– Insurances and finances give you generally £50-£100 cashback
– Phone offer: £50-£100
– Travelling and hotels: Expedia ~5%, Booking.com ~4%, Venere 12% […]
– Trains: thetrainline, raileasy, gatwick express, nationalexpress
– Broadband: BT, Sky offers £120+
– Domain name: 1-2-3 reg at 30%
– and obviously you have all small stationary, etc.
When HRMC say you “should” do something that doesn’t mean you have to do it.
Read between the lines, get more info and claim things you are allowed to claim to reduce your taxes.