Expenses Recap

14 July 2017

In this blog we discuss some of the lesser-known expenses that you might be able to put through your limited company and save 19% Corporation Tax and avoid any P11D benefit.

Medical expenses

The following expenses are tax free - this means they don't go on your P11D and you still receive 19% Corporation Tax deduction.

Health checks - an employer can provide an employee / director with one health screening or medical check up per year (these must be available to all employees of the business)

Computer screen users – if an employee / director is required to use a computer screen then the employer can claim eye tests and also special corrective glasses if these are required as a result of computer screen use. This last point is a bit trickier to prove so we tend to advise to just claim the eye tests.

Remember that private medical insurance is a P11D benefit and you would pay additional tax on this.

Training costs

HMRC say you can put training costs through your limited company and save 19% Corporation Tax:

...as long as the training is designed to impart, instill, improve or reinforce any knowledge, skills or personal qualities which:

• are likely to prove useful to the employee when performing the duties of the employment; or

• will better qualify the employee to perform those duties.

This generally means that as long as the training is related to your job role then you should be fine. If an accountant put through the cost of attending a tax update course through a limited company this is clearly a business related training cost so would be allowable. However if an accountant put through the cost of a cooking course this obviously has nothing to do with accounting so would not be a tax allowable expense!

The larger the cost of the course, the more evidence/justification you're going to need to provide to HMRC should they ever launch an investigation - you should be able to clearly show how the business benefited from the training.

Charitable donations

A donation by a company to a charity is a deductible business expenses. Not only will you save 19% Corporation Tax on the donation, you will also helping a good cause!

Subscriptions and publications

Subscription fees paid to professional bodies where membership is relevant to the company will save 19% Corporation Tax through the company and avoid any P11D as long as they are on this list. The simple rule of thumb is if it's not on the list then you can't claim it back!

For newspapers/magazines, as with other business expenses, as long as these are for the purposes of your business then you can put them through the company and save tax. A copy of The Sun newspaper isn't specific and has nothing to do with your business, however a specific engineering or software magazine would be fine.

The same goes for technical manuals and books - as long as they are business related then they can usually be claimed without any issues.

As always, just give us a shout directly if you have any queries or further questions! :)

Do you have any questions about company expenses?

Follow this link to contact the team at Source Accounting to find out more