First of all what are expenses?
Expenses are costs which you incur in the day to day running of the business. You can claim most of these expenses usually in the tax year they are incurred. The more expense you claim the low your profit will be and the lower tax you have to pay.
So what expenses can I claim?
You will mostly be claiming revenue expenses in full in the year you incur them and you will depreciate capital expenses (buying assets) over time.
Common business expenses you can claim are:
- vehicle expenses, transport costs and travel for business purposes (for vehicles used for both personal and business purpose apportionment is required, you will need to keep a log book to determine this)
- rent paid on business premises
- depreciation on items like computers and office furniture
- interest on borrowing money for the business
- some insurance premiums
- work-related journals and magazines
- membership of professional associations
- work-related mobile phones and phone bills
- work uniforms
- tax agent’s fees.
What about Entertainment expenses?
Almost every business will have some entertainment expenses such as meals while travelling, Corporate Boxes or staff Christmas parties. Business entertainment expenses are usually deductible, however for some are only 50% deductible while others are 100% deductible.
Expenses which have a private element are only 50% deductible. Some examples are:
- Corporate boxes
- Holiday accommodation (can be 100% depending on usage)
- Recreational Boats
- Food and Drink at business premises
- Social events such as Christmas Parties
- Offsite food and drink
- Gifts of food and drink
Examples of expenses which are 100% deductible
- Food and drink while travelling on business
- Food and drink provided at a conference
- Light meals provided in a dining room for senior managers
- Promoting your business, products or services
- Cost of Freebies promoting your business
- Entertainment supplied for charity
- Offshore entertainment
Getting a tax agent or accountant to complete your return may end up saving you money. They know all the things you can claim for.
Contact us if you want to discuss specific items which you can claim for in your tax returns.