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When it comes to filing taxes in the UK, the waters can be a bit murky as to what and how you can claim as business expenses. This becomes especially true when it pertains to the business sector and what is considered an allowable expense.
1. Equipment Costs
When it comes to financing your personal business or a large company, chances are that you are going to be spending a great bit of money on different equipment. From the copiers to the staplers to the telephones and more, there is always something and a new piece of equipment required in order to make the most from your business endeavours. Yet, claiming these products is not necessarily something that many businesses and individuals do as the calculation in the UK can be a bit confusing. It is something, however, that should be considered as a proportion of the equipment costs can be returned directly back to you as the entrepreneur. UK tax law contends that a proportion of the business expense, up to a certain percentage, can be claimed as a deduction on taxes.
2. Mark Your Travel
Travel is a necessary part of many occupations. Whether it is running between meetings or flying halfway around the world, the costs that are incurred during this portion of work can be very overwhelming to a minute budget. For that reason, if you are looking to make your business expense budget work for you, make sure that you record and track your travel expenses.
3. Overnights Count
Not only can your travel be claimed on your taxes, but many times your overnight work expenditures can as well. If you are traveling and staying in a hotel, for instance, while you are working, the meals and expenses that you pay out of pocket can be claimed.
4. Work From Home Works for You
For many individuals, especially young entrepreneurs in a struggling economy, the idea of working from home is something that is not only appealing but is necessary. The misconceptions arise, however, that this can hinder your chances of garnering money back on business expense claims. The truth is, however, that working from home can have its tax perks. Individuals can make the very same claims that they do when they go to the office, within reason of course. It may be possible to claim a portion of home expenses on business taxes. Individuals need to be aware that making the claim that a portion of a home is part of the expense is likely to be the first challenged so make sure that you can make a strong and viable case as to why you are claiming.
5. Watch Your Company Money
If you work for a company that tends to spoil its employees, this can be a great perk. Yet, it can cause some problems on taxes and filings, too. For every gift or company perk, it may be possible to be taxed. So, for that reason, those that wish to make a claim need to be aware of how much they are going to have to pay as a result of their company’s good business. One way to not only claim more but, more importantly, have to pay less is to watch how your company gives you money. An expense card or credit account can help you save on the backend in a way that is not possible when a gift is given forthright.
6. Track Everything
Unfortunately, it’s not easy to make additional claims on your business expenses unless you have the evidence and information to back it up. That is why it is so vital that you keep track of all of the forms and receipts that are important to your business finances. Tracking everything will allow you to see more clearly what you can and cannot claim, and, ultimately, will increase your bottom line. Without the information, you may miss out on opportunities for claims that add up to the hundreds or thousands of dollars.
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7. Do Not Be Greedy
When it comes to making claims, of course we all want to get our money back. After all, we earned it. But, becoming greedy or claiming too much can cause red flags and cause your taxes to be more scrutinized and picked over. Be aware of the laws and be understanding of what you can and cannot claim. Stay legal. Stay fair. Make legitimate claims.
8. Hire Help
In today’s virtual world, tax help is all around you. But, more than just during that special time of year, a bookkeeper can be a great way to mind your finances beyond a single season. For that reason, those in business should consider hiring a virtual bookkeeper to help with their expenses. These individuals can serve as the link between financial knowledge and entrepreneur in a way that provides foundational support. Not only will they help keep you on track throughout the year, they will also prove invaluable when it comes to filing those business claims.