If you run a limited company, you already know the basics. You claim your accounting software, your stationery, maybe your mileage. But a lot of business owners quietly leave money on the table each year by missing expenses they were perfectly entitled to claim.
That matters. Every legitimate expense you put through your company reduces your taxable profit, which means a lower Corporation Tax bill (the tax your company pays on its profits). So it's worth knowing what you might be missing.
Use of home as office
If you do company work from home - even part of the time - your company can pay you for using your home as a workspace. Many directors forget this entirely, or they claim only a token amount because they're not sure what's allowed.
There are two main routes. You can claim a flat weekly amount that HMRC accepts without paperwork, which is simple but small. Or you can work out a fair share of your actual home running costs, such as light, heat, broadband and council tax, based on the rooms you use and the hours you work in them.
The second route usually gives you a better claim, but it does mean keeping a sensible record of how you worked it out.
Heads up - If your company pays you rent for using a room at home, that rent is income for you personally and needs to go on your Self Assessment (the yearly tax return individuals file with HMRC). The numbers still work out well for most directors, but it's worth knowing.
This one is small but mighty. If your company takes out a mobile phone contract in the company name and the phone is provided to you as a director, the cost of the phone and the calls is an allowable business expense. There's no taxable benefit for you personally, even if you use it for personal calls too.
The key detail is that the contract has to be between your company and the network. A personal contract that you simply pay through the business doesn't get the same treatment.
If you use a computer screen for your work - and most directors do - your company can pay for an eye test. If the test shows you need glasses specifically for screen work, the company can pay for those too.
This isn't a route to claim for your everyday reading glasses. The prescription has to relate to your screen use. But it's a genuine cost that many directors pay personally without realising the company could cover it.
Training that keeps your existing skills up to date, or builds on the work your company already does, is usually an allowable expense. That includes course fees, exam fees, books and travel to attend.
Where it gets trickier is brand new skills that move you into a completely different line of work. HMRC tends to view those as a personal investment rather than a business cost. So if you're a software developer doing an advanced coding course, that's fine. If you're a software developer training to be a yoga teacher, that's a different conversation.
If you belong to a professional body that's relevant to your work, the subscription is usually allowable. HMRC keeps a list of approved bodies, and most well-known professional associations are on it.
The same goes for trade journals, industry magazines and online memberships that genuinely help you do your job. People often pay these personally out of habit. They don't have to.
Your company can spend a set amount per person, per year, on an annual social event for staff - and that includes you as a director. It has to be open to all employees, and it has to be a yearly event rather than a one-off treat.
For a one-person company, that means you can take yourself out for a proper meal once a year and put it through the business, as long as you stay within the limit per head. Go over the limit, even by a pound, and the whole cost becomes a taxable benefit. So it's worth planning rather than guessing.
Most directors don't lose tax by doing anything dramatic. They lose it in small, repeated moments of "I'll just pay for that myself."
There's a useful rule that lets your company give small gifts to employees and directors without creating a tax charge. The gift has to be modest in value, it can't be cash or a cash voucher, and it can't be a reward for work done or written into your contract.
Flowers on a birthday, a bottle of something at Christmas, a small thank-you gift - these can all qualify. Directors of close companies (small companies controlled by a few people) have a yearly cap on the total they can receive this way, but within that cap it's a genuinely tax-free perk.
If you pay into your pension personally, you get tax relief through the personal tax system. But if your company pays directly into your pension, the contribution is usually an allowable business expense, which reduces your Corporation Tax. And it doesn't count as income for you personally.
For many director-shareholders, company pension contributions are one of the most tax-efficient ways to take money out of the business. It's worth a proper conversation with your accountant about how much makes sense for your situation.
If you use your personal car for business journeys, your company can pay you a mileage rate for each business mile. HMRC sets approved rates, and as long as you stay within them, the payment is tax-free for you and deductible for the company.
Business journeys mean travel to temporary workplaces, client meetings and similar trips. Your normal commute to a permanent workplace doesn't count. Keep a simple log of dates, destinations and miles - a note on your phone is fine.
This one catches a lot of new company owners. The costs you paid in the months before your company officially started trading - the laptop, the website, the initial software, the professional advice - can often be claimed once the company is up and running.
There's a time limit on how far back you can go, and the expense has to be the kind of cost that would have been allowable if the company had already existed. But if you've recently set up your company, dig out those old receipts before you write them off.
Business bank account fees, card machine charges, interest on business loans and the cost of business finance are generally allowable. These are easy to miss because they tend to sit quietly in the bank feed and never feel like "expenses" in the usual sense.
If your bookkeeping software is pulling transactions in automatically, take a moment to check they're being coded properly rather than dumped into a catch-all category.
Client entertaining is famously not allowable for tax. But small gifts to clients can be, as long as they carry a clear advert for your business, they're not food, drink or tobacco, and they stay below a modest value per recipient per year.
A branded notebook, a calendar with your logo, a useful gadget with your name on it - these can work. A nice bottle of wine, sadly, cannot.
Heads up - Rules around what's allowable change over time, and the detail matters more than the headline. If you're not sure whether something qualifies, ask before you claim rather than after HMRC asks you.
If your company buys equipment for you to use at home for work - a desk, a chair, a monitor, a printer - it's generally an allowable cost for the company. As long as any personal use is incidental, there's no taxable benefit for you.
This is different from your company reimbursing you for equipment you bought personally. The cleanest approach is for the company to buy the item directly and own it.
It might feel cheeky to mention, but the fees you pay your accountant for running the company's books, preparing the accounts and filing the Corporation Tax return are an allowable expense. So are legal fees connected to the running of the business, within certain limits.
Personal tax advice for you as an individual sits in a greyer area, so it helps to have those fees invoiced clearly so the business and personal portions can be separated.
The simplest fix is a system. You don't need anything fancy.
Every expense you claim needs a clear business reason and, ideally, a receipt or invoice to back it up. HMRC can ask to see your records, and "I'm pretty sure that was for work" isn't a strong answer. The good news is that digital records are perfectly acceptable, so a tidy folder of photos and PDFs does the job nicely.
Where TaxOptimiser comes in
Most of the claims on this list are small on their own. Add them up across a year, and across several years, and they make a real difference to what your company keeps and what it hands over in tax.
If you'd like a second pair of eyes on what you're currently claiming - and what you might be missing - we're happy to take a look. No pressure, no jargon, just a clear answer about whether your expenses are working as hard as they could be.