UK businesses tend to lose out on millions each year on unclaimed tax relief. You need to know all about these opportunities to ensure that you get the permitted tax relief.
Learning all there is to know about the allowable tax claims is important so that you don’t pay more than you are legally obligated to in taxes. Determining what you can claim – and what you can’t – can be tricky. We will help you out here by running through personal expenses that you can claim through your limited company.
Home Office Expenses
HM Revenue & Customs (HMRC) allows directors of a limited company to claim house office expenses at a flat rate of £4 per week if they use their home as an office. There is no need to show the receipts to claim the personal expenses.
Moreover, limited company directors can also claim for heating and lighting costs in case they are operating a business from their home. Other home office personal expenses you can claim include phone and broadband service costs.
But you need to establish the proportion of personal house expenses used for business to claim the expenses. Work out the proportion of utility including heating and lighting that is used for business purposes and the length of time the utility has been used for business purposes.
You can also claim expenses for specific clothing required for the business. This can be clothing that you use exclusively for a business such as a company uniform.
Telephone costs can be taxed in whole if you use mobile or broadband services exclusively for the business. You can claim the VAT element of business calls in case you are VAT registered. However, you cannot claim line rental as this cost is fixed.
If you use your personal car for a business person, you can claim the expenses to get tax relief. You are allowed to claim 45p for the first 10,000 miles and 25p thereafter. But you need to prove that the transport was exclusively used for work purposes such as attending a business meeting.
Limited company directors are also allowed to claim medical expenses when injured while performing a duty. You can claim the cost of an eye test in case you use a laptop, PC, or mobile device as part of the work. Moreover, you are also allowed to claim the cost of contact lenses and glasses if you require them for reading business-related documents.
Directors of limited companies are also allowed to claim costs for a health screening assessment or medical check-up during a year. Health screening according to HMRC refers to identifying a particular health risk such as for COVID.
Limited company owners and directors are allowed to claim personal expenses that relate to the business. The personal expenses that you can claim must be necessary and wholly or exclusively for the business. You can claim these expenses against the company profit that will reduce the tax liability.
For more information about a UK limited companies, contact us. Our team will be happy to help you with the formation of your company.