Many sole traders and small businesses think that claiming expenses is one administrative headache that they can do without. A fact that means many don’t claim the tax reliefs they are entitled to. When running a small business however, every little helps, and claiming expenses could ensure your venture has the cash flow it needs to not just survive but thrive in these uncertain economic times.
Leading accountancy firm Bevan & Buckland assists small businesses and sole traders serving all sectors. The practice is urging them to gain an understanding of what can and can’t be claimed to ensure the necessary tax reliefs can be accessed.
“A wide number of expenses are incurred as a small business or sole trader. Only expenses which have been incurred solely and essentially in the course of running your company can be reclaimed however. Expenses which have a dual purpose consume certain criteria. Bevan & Buckland is here to advise you on the expenses which can be claimed,” said Kristian Corbisiero, Digital Accounting Manager at Bevan & Buckland Chartered Accountants.
Business travel and accommodation, mobile telephone contracts and calls, computer software, postage, stationery and use of your home as an office are all claimable business expenses. Childcare and clothing that could be used as business and everyday wear are not classed as business expenses. You should always keep all of your receipts and invoices in order to prove that any claims you have made have been legitimate. Whether you prefer to keep a physical copy or a digital backup make sure you keep your receipts as HMRC can request to see them anytime during the 7 years after the expense was incurred.
“Expenses are deducted from your annual turnover and as you are only taxed on your turnover, the larger your expenses bill, the lower your tax bill will be. However, don’t forget that even though expenses are tax deductible they are still a cost coming out of your profits, so only buy items that you actually need. Accounting packages such as Xero and QuickBooks are great ways to gain control of your finances,” concluded Kristian.
Discussing your business expenses with an accountant to ensure they are valid claims is recommended. Please call Bevan & Buckland today on 01792 410100. Alternatively, email [email protected].