We have all heard of the term Expenses but what are they, and why are they important?
When you run a business, there are usually costs involved that you have to pay for to be able to run your business. These are Expenses, also called Running Costs or Overheads.
At the end of the year we can take our business costs (expenses) away from our income to give us our net income which is what we pay income tax on.
If we want to reduce our net income we might want to claim all the expenses we can. But knowing what you can claim is key as you might claim for the wrong thing and be liable for more income tax.
What can you claim?
Here is a list of the common things that a small business might want to claim as an expense:-
This is things like, printing ink, copier paper, pens, postage, filing and notepads etc.
- Set up Costs
This might be your computer or laptop, your printer, website, hosting, website copy, advertising, and branding.
- Subscriptions and Professional Fees
This is things like Canva or Zoom membership, scheduling tools, regulatory bodies, and accountancy fees.
- Car Costs (100% work)
If you use a car for work then you can claim the cost of your car, including finance, tax, insurance, breakdown cover and fuel.
- Car Costs (Occasional Work)
If you use your car sometimes for work, like visiting clients, meetings, or network meetings you can claim the mileage you used to get to those meetings.
If you hire a coach or buy an online course or a self-development course you can claim the cost of these too. The same as self-development books those can be claimed as an expense.
I hope you have found this helpful, but of course there are loads more expenses that you might have, and I have not covered. If in doubt, just as a qualified accountant or bookkeeper to clarify things.
My aim is just to give you more of an idea of what you can claim, and it is certainly not comprehensive, so always ask as professional if you are unsure about anything.