So, what expenses can you claim back? In this blog post, we’ll highlight ten of the most surprising expenses your small businesses should be taking advantage of.
Grab your calculator: let’s crunch some numbers.
1. Electricity, heating and water
The costs of providing your employees electricity, whether they work from home or in an office, can be claimed back for tax relief. For remote workers, the amount you can claim back for each employee varies, so it’s always important to check with an accountant first.
Offices, however, can claim full tax relief for the cost of providing electricity, water, and heating to their employees. So, really, there’s no excuse for a cold office in the winter months anymore.
2. Entertaining employees
Yes, we’re not kidding. Providing your business keeps your ‘entertainment’ within the HRMC’s definition, you can claim expenses on spoiling your employees. These are the mandatory rules for claiming expenses on entertainment, of which your business must follow all three:
- The event must be open to all staff
- It should be an annual event, such as a Christmas party
- The cost must be less than £150 per guest attending
You may not be able to take your entire workforce to Disneyland Paris, but we think this is a pretty good compromise.
3. Small gifts
We’re still not kidding. According to Santa Claus himself at HRMC, you don’t have to pay tax on a ‘trivial benefit’ (or gift) for an employee, providing it’s not:
- Over £50
- Cash or a gift voucher
- A reward for their work performance
- In their terms of contract
So, if you’re buying your employee a small birthday gift or wedding present, you can no longer use the ‘I haven’t got the money’ excuse.
4. Medical appointments
Depending on the nature of your workplace and working life, your business can claim expenses on certain medical appointments. Here at Turbine, for example, our employees use computer screens every day for work purposes. As a result, we’re legally able to claim for eye examinations.
With almost one in seven of UK workers suffering from mental illness in the workplace, ensuring your employees are happy and supported is essential.
Fortunately, your company may be eligible for claiming expenses for company-provided counselling, providing it’s:
- For a welfare-related issue, such as: ill health, abuse, bereavement, relationship problems, or workplace stress
- Available to all your employees
Equally, these services mustn’t include:
- Tax or legal advice
- Any financial advice other than problems relating to debt
- Recreational or leisure advice
- Medical treatment
6. Professional subscriptions
Your business can reclaim tax on subscription fees to certain HRMC-approved professional organisations, providing:
- You haven’t signed up for a lifetime subscription
- Your employees haven’t paid for the fees out of their own pocket
The subscription in question must be on HRMC list on of approved professional organisations and learned societies, however.
7. Charitable donations
If your company chooses to make a Gift Aid donation to charity, you’re usually able to claim tax relief on this expense. The rules vary depending on the type of donation, however, so it’s always best to check with your accountant first on what’s best practice.
Still, tax relief or no tax relief, money should never be an incentive to be charitable, right?
8. Mobile phones
As such an essential tool for the modern day working life, it’s no wonder that businesses can claim tax relief on mobile phones purchased under their company’s name.
Although your employees can’t make a claim for their everyday home-to-work commuting costs, they can claim for any journey that:
- Is between business appointments. For example, if an employee drives to a sales or client appointment.
- Is to a temporary workplace, or anywhere where they expect to work for less than 40 percent of their working time within the next 24 months.
Okay, okay, so the likelihood is you probably don’t need dogs for your business to run smoothly. (Although, in our opinion, we think dogs are completely necessary.) But many workplaces, such as the police force and the army, require dogs for carrying out tasks that humans are incapable of doing.
In these cases, and in the eyes of the government, dogs classify as capital assets that qualify for capital allowances. As a result, feeding them, taking them to the vets and looking after them can be claimed as a necessary business expense.
Keep count of your pennies
Claiming expenses is a necessary and beneficial task for your business. Without understanding what you can and cannot claim tax relief on, you may be chucking some much-needed cash down the drain.
However, we know that traditional processes for claiming expenses are often long, laborious and hindered with layers of bureaucracy. In fact, the process of asking for the odd five pounds for a couple of office supplies might not always be worth the effort for some of your employees.
Invest in an easier, intuitive, and automated way to claim back expenses. With the helping hand of technology, you won’t be forgetting what expenses to claim back in the future. And, more importantly, your business will have the extra money to spend on bigger, better, bolder things.