What Can I Claim on Expenses – Limited Company UK

Running a limited company in the UK comes with certain responsibilities and some significant tax advantages. One of the key benefits is the ability to claim allowable business expenses, which can help reduce your company’s Corporation Tax bill.

But what exactly counts as an allowable expense? In this guide, we’ll walk through the categories of expenses you can claim through your limited company—and the rules you need to follow to stay compliant with HMRC.

Understanding Allowable Business Expenses

Allowable business expenses are costs that are wholly, exclusively, and necessarily incurred for the running of your business. These expenses can be deducted from your company’s profits before calculating Corporation Tax.

To claim any expense:

• It must be for business use only
• You must keep accurate records and receipts
• It should be documented in your accounts

1. Office and Equipment Costs

These are common for both home-based and external offices:

You can claim:

• Rent for office space
• Utility bills (if the office is rented solely for business)
• Office supplies (paper, pens, printer ink)
• Computers, laptops, and accessories
• Software and subscriptions (e.g., Microsoft Office, Adobe)

Home Office:

You can claim some of your home bills if you work from home. Either:

• Use HMRC’s flat rate (simpler)
• Or claim a proportion of actual costs (more accurate but complex)

2. Travel and Mileage

Business-related travel expenses are claimable, but commuting to your regular place of work is not.

You can claim:

• Mileage (45p per mile for the first 10,000 miles in a tax year; 25p thereafter)
• Train, bus, taxi, and air travel (business-related only)
• Hotel accommodation for business trips
• Meals and subsistence during overnight stays

3. Motor Vehicle Costs

If the company owns a car, you can claim:

• Lease payments (portion may be disallowed if it's a high CO2 vehicle)
• Insurance, road tax, servicing, fuel (business use only)
• Parking fees (not fines)

Alternatively, you can claim mileage allowance if using your vehicle.

4. Professional Fees and Services

You can claim costs for professional services that support your business operations.

You can claim:

• Accountant fees
• Legal services
• Consultancy services
• Business formation and filing services

5. Salaries and Staff Costs

If you employ staff (including yourself as a director), you can claim:

• Gross salaries
• Employer’s National Insurance Contributions
• Pension contributions (within certain limits)
• Employee benefits (subject to benefit-in-kind rules)

6. Marketing and Advertising

You can claim marketing and advertising costs used to promote your company:

• Website design and hosting
• Social media ads
• Print advertisements
• Promotional materials (flyers, banners, etc.)

7. Training and Development

Relevant business training and development courses are claimable if they are intended to maintain or improve existing skills.

Examples:

• Professional development courses
• Online learning platforms (e.g., LinkedIn Learning, Coursera)
• Conference or seminar tickets

Note: Training to acquire a new trade or skill may not be claimable.

8. Insurance

You can claim business-related insurance policies such as:

• Public liability insurance
• Professional indemnity insurance
• Employer’s liability insurance
• Director’s and officer’s insurance

9. Bank Charges and Financial Costs

You can include:

• Business bank account fees
• Loan interest (if the loan was used for business)
• Credit card processing fees

10. Mobile Phone and Internet

• Business phone contracts can be claimed in full under the company’s name.
• Only the business portion of costs can be claimed if using a personal phone.
• The Internet can be partially claimed if working from home.

11. Entertaining and Gifts

Client entertainment is not usually tax-deductible, but:

• Staff entertainment (e.g., annual staff party up to £150 per person per year) is allowed.
• Trivial benefits (e.g., small non-cash gifts under £50) for employees are allowed within limits.

12. Subscriptions and Memberships

You can claim:

• Professional body memberships (e.g., ICAEW, CIPD)
• Trade journals and magazines
• Online subscriptions directly related to business

13. Depreciation and Capital Allowances

Large assets (like vehicles, computers, and machinery) can’t be expensed immediately but may qualify for capital allowances or be depreciated over time.

Record-Keeping Requirements

To ensure compliance with HMRC:

• Keep all receipts, invoices, and mileage logs
• Maintain clear separation between personal and business expenses
• Store records for at least 6 years

Conclusion

Knowing what you can and can’t claim as a limited company is crucial to optimizing your tax position and staying compliant with HMRC regulations. By carefully tracking your allowable expenses and seeking help from an accountant when needed, you can reduce your tax bill and improve your company’s financial health.