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What Expenses Can I Claim?

What can I claim?
 
Are you a seasoned veteran of running a company or just starting out for the first time? Whatever the case, there are often forgotten expenses that go unclaimed, which means you could ending up paying more tax than you need to. We’ve put together this guide to help you make the most of the tax relief available to you. Remember the general rule is that expenses must be  “wholly, exclusively and necessary” for the business.
 
Having the right information in your Crunch account is key to keeping your business finances running smoothly. Throughout this guide, we’ve highlighted the Year End Requirement. Pay attention as this is the information we need you to enter into the Crunch Platform so we can complete your accounts as quickly as possible.

Use of home as office expenses

HMRC allow employees (including Directors) to claim £4 a week when working at home - this equates to £208.00 per year. To claim this amount as an expense you must undertake important and considerable duties related to the main trade of your business.  For example, you won’t be able to make a claim if you just sorted business post at home.
This is a simple method agreed by HMRC and allows you to include expenses of £208 in your annual accounts for the use of your home as an office.
 
Year End Requirement: you need to confirm that you wish to claim use of home as office expenses in your annual accounts. To do this you will need to confirm you undertake substantive duties relating to your business at home.

Rental expenses

If you spend a significant amount of time working in a designated area of your house for business purposes you can possibly rent an area of your home to your company. This is an extremely complex area and you should read our help centre article before deciding if this applies to your business. You should then discuss your proposals with one of our accountants. You will need to set up a rental agreement between yourself and your company before you can include rental expenses of this type in your accounts. There are also implications for your personal tax situation which you should consider before proceeding with a rental agreement.
 
Year End Requirement: we will need to see the rental agreement between you and your company and how the rental amount has been calculated.  Therefore, make sure you have a rental agreement in place and upload your workings supporting the expense calculation / email us at the end of your accounting year.

Telephone Costs
 
We recommend that you don’t claim business usage when the contract is in your own name. Instead, take out a business contract in the company name with the phone service provider. Most phone and internet providers have unlimited allowances or packages meaning it becomes very difficult to justify a proportion of the cost of your personal telephone (mobile
and/or landline) when it’s unlimited or not itemised.

Keep it simple and speak to your existing mobile provider - you may be surprised to find out that their business contracts are more reasonable than first thought. Claiming £40.00 a month on your business phone takes almost £100.00 off your overall Corporation Tax bill. If you buy the
handset outright, remember to record it in
Fixed Asset - Equipment Cost.

 
Year End Requirement: We must have confirmation that the business phone is used 100% for the purposes of your business -  so attach your bill to the expense on your Crunch account, showing the contract in your company's name.

Travel & Subsistence

Business Mileage

If you’ve used your personal car or van to get to a temporary place of work and paid out for the petrol personally, you’re entitled to get this back from your company in the form of 45p per mile travelled for the first 10,000 miles in a given tax year.

The great thing about this is that not only does the business expense reduce your overall Corporation Tax bill, it also means you can reimburse yourself the amount claimed.
Remember if your company owns the car, you can only claim the cost of petrol.
 
Year End Requirement: we must have your mileage calculations so make sure you either use our excellent (and free) mobile application Tripcatcher or use our mileage spreadsheet - if you use the spreadsheet, simply send it to us when you’ve finished your company year. For any vehicles owned by the company, please contact us so we can advise.

Subsistence
 
Never claim a day rate unless you’re staying overnight for business purposes or you’re overseas. You may hear from others about a £5 or £10 day rate, but this is only available to certain companies because they have a special dispensation with HMRC. Remember when recording such expenses, the amount entered must be the actual value of the expense incurred.
 
Why not Snap it using our great app? The information will appear in your account within the next few days - less admin for you.
 
 
24 Month Rule - Compliance Issue
 
The availability of travel and subsistence expenses may change over time if certain requirements are not met. This is known as the ’24 Month Rule’.
 
This rule comes into effect if you expect to, or have been working, at the same workplace for more than 24 months.
 
This rule is only enforced when you spend more than 40% of your working time at the same location (e.g you are there 2 of 5 days a week).
 
It’s important to remember that  if you change where you work and the route taken is not substantially different, the new location will not extend the 24 month period.
A workplace can be a geographical area but for different clients, please see HMRC’s guidance on the matter.
 
Once the 24 month period is reached, you can no longer claim for travel and subsistence expenses incurred while working in that place.
 
If you think this affects you, let us know today!

Staff Training 

This is only allowable if:
  1. It's going to enhance existing knowledge and skills; and
  2. It's required for business purposes specific to your company's trading activity. 
Year End Requirement: if you’ve claimed for any staff training costs, we’ll review these so please make sure that you attach a receipt supporting the expense and let us know how it relates to your company.
Fixed assets and disposals of fixed assets
 
Your company may buy fixed assets such as a laptop, PC, business phone, or even some furniture. So long as it’s 100% for the business, you can record as a business fixed asset.

You may continue to use the asset year on year or if the asset is no longer used by your business or obsolete you may decide to dispose of it.  Whether you continue to use a fixed asset, sell it or even scrap it, we need to know in order to ensure it is correctly accounted for each year

Year End Requirement: we need to know whether you still use the item or whether you’ve sold it.  If you have sold the item, we need to know how much the item was sold for and on what date. Similarly if you scrap the asset, we need to know the date this happened, In the attachment section below, we have a handy Fixed Asset Register that you could use and send across to us either at the end of your year or as and when the item is sold.

Pensions
If you haven’t already established a company pension scheme, it’s something that could be well worth looking into.
 
If your company pays directly into your personal pension scheme, the company will receive significant reductions in the amount of Corporation Tax due, as it lowers your taxable profits.
You can potentially roll forward (or backwards) any unused allowances from the date the scheme took effect or from when you were a named party to the scheme. However please speak with a pensions advisor who can confirm this.
 
We hope you have found this to be a useful read and if you have any feedback or suggestions, please send these onto support@crunch.co.uk
 
 
 
 
 
Last Updated: 22 Jun 2017 03:10PM BST

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