Allowable Expenses

What expenses can I claim?

You can claim for any business expenses which you have incurred in order to earn your profits. These expenses are normally referred to as revenue expenditure.

Revenue expenditure is your day to day running costs and covers such items as:

  • Purchase of goods for resale
  • Wages, rent, rates, repairs, lighting and heating etc.
  • Running costs of vehicles or machinery used in the business
  • Accountancy fees
  • Interest paid on any monies borrowed to finance business expenses/items
  • Lease payments on vehicles or machinery used in the business

If you are registered for VAT the expenses you claim should be exclusive of VAT.

What expenses can’t be claimed?

The general rule is that you cannot claim for any private expenses i.e.

  • Any expense, not wholly and exclusively paid for the purposes of the trade or profession
  • Any private or domestic expenditure e.g. your own wages, food, clothing (except protective clothing), income tax etc.
  • Business entertainment expenditure i.e. the provision of accommodation, food, drink or any other form of hospitality.

You cannot deduct capital expenditure in calculating your taxable profits, however you can claim what are known as capital allowances on certain expenditure.

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What about expenses which are partly for business and partly private?

Where expenditure relates to both business and private use, only that part which relates to your business will be allowed. Examples of such expenditure are rent, electricity, telephone charges etc., where the premises involved is used partly for business and partly for private purposes. These expenses will need to be apportioned to exclude the private use.

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