Home Budget 2007 Company Profile Services Accountancy Zone Business Zone Tax Zone IR35 Update News Articles Feedback Search Legal Notice How To Find Us In order to be allowed as a deduction for tax purposes, all expenditure incurred by a sole trader, partnership or company must be incurred wholly and exclusively for the purposes of the trade, profession or vocation. Examples of allowable business expenditure are given below. Advertising and promotion expenditure, including business gifts (up to £10 in value, identifying the company, and not comprising alcohol, tobacco or food), direct mail and door-to-door campaigns, trade fairs and exhibitions, public relations, certain gifts to designated educational establishments, donations to local bodies established for educational, cultural, religious, recreational or benevolent purposes. Bad debts, doubtful debts (where specifically identified), VAT on bad debts (except where recovered from Customs and Excise. Employee costs including Class 1A National Insurance contributions, compensation for loss of office, contributions to Local Enterprise Agencies/Companies made before 1 April 2000, contributions to Training and Enterprise Councils (TECs) and Business Link organisations made before 1 April 2000, employer's liability (compulsory) insurance, employer's share of Class 1 National Insurance contributions, pensions paid to former employees or their dependants, redundancy payments, security equipment, training courses for employees or past employees (subject to restrictions), wages and salaries, payments to outworkers and sub-contractors, welfare services, including staff entertainment. Hire of assets including reasonable charges for hiring capital goods (allowable only on the proportion of hire-car use attributable to business purposes). Interest on hire-purchase of goods bought for business use, money borrowed for business purposes, mortgage or loan to buy property for business use or to be let commercially. Overheads including insurance of premises, light and heat, rates, telephone costs. Office administration costs including agency fees for permanent and temporary staff, books and publications, postage, printing and stationery. Professional fees including annually recurring accountancy and audit fees, bank charges on business accounts, debt collection, insurance against loss of profits, public liability, theft, and so on, most legal fees (except where connected with acquisition of capital assets), registration of trade mark, expense of taking out a patent, subscriptions to trade associations and journals and professional bodies, accountancy expenses of a Revenue investigation (where any discrepancy is minor and no interest or penalties are involved and no adjustment to a previous year). Repairs and maintenance including decoration of premises, laundry and cleaning costs, repairs and maintenance of plant and machinery, repairs and maintenance of premises, replacement of small tools and overalls, servicing business equipment. Trading activities such as delivery charges, carriage, packaging, discounts allowed to customers, goods or materials for re-sale, materials used for purposes of trade or business. Travel costs including insurance and maintenance of business vehicles, running costs, insurance and maintenance of private car so far as it is used for business, subsistence and hotel bills when away from home on business, travel expenses when on business trips in the UK or overseas. VAT if not registered and therefore unable to reclaim it as input tax, input tax otherwise not reclaimed, for example, on cars or if partially exempt. Use of home for business purposes. Rent of domestic premises used for business purposes will be allowed as a deduction for tax purposes based on the proportion of the premises not in domestic use, although the sum allowed will not generally exceed two-thirds of the rent. Use of motor car. A self-employed person may claim tax relief on the business portion of using his or her own car. This is calculated by taking the total running costs of the car, including capital allowance and any interest paid on a loan to buy the car. The business element is calculated by multiplying this figure by the number of business miles and dividing by the total number of miles. Sometimes the tax inspector will accept an estimate. It should be noted that travel from home to work is not business mileage. For clarification on what you are, and are not, entitled to claim for contact us. [ Tax Zone Home]