Updated: Aug 29, 2020
On profit 'Ltd company' pays corporation tax. Profit is equal to income minus expenses.
More expenses you show, the less profit to pay tax on.
Your company expenses can be paid in two ways;
1) Company Bank account & cash payment
2) Reimbursed expenses when you paid from your own pocket.
It is common for small companies owners to pay expenses from own pocket. Sometime not having the full knowledge of accounting rules, leaves owners in doubt if they can claim for the expenses they have incurred.
Below are few of following tips which can help you expand your knowledge and save tax
If you travel to your client, you can claim travel expenses either on actual incurred expenses or 45 pence per mile up to 10,000 miles in a year if you use your own car
Any donation made to register charity can be deducted as day to day ruining expense
You can also claim for accommodation while you are on business travel providing expenses are reasonable and not excessive.
Bookkeeping and accounting fees are also claimable expenses
You are allowed to claim up to £150.00 staff party expenses as long as majority of event expenses are staff related.
Any business equipment such as printer,Laptop etc. expenses can also be claimed
HMRC allows £4.00 per week as home office use expenses and you do not need to keep any paperwork for it
Eyesight test expenses can be claimed as long as you can provide evidence it is necessary for the work such as admin staff need to use computer on daily basis. Any eyesight test will be a allowable expense for admin staff.
Pension contribution is a allowable expense
Professional subscription is allowable expense for certain professional bodies
Mobile phone, broadband, landline which are solely used for business purpose, you can claim 100% as business expense. Whereas phone, broadband etc. are also used for personal purposes, you can claim proportion of it such as 50% as personal use and 50% as business use
Any Employee work related Training cost can be claimed as expenses
I hope you will find the above ltd company tax saving tips useful and If you have any question please do not hesitate to get in touch