What Business Expenses Can Directors Claim?
As a director of a company, you are entitled to claim expenses that are incurred while carrying out your duties. These expenses can help reduce your company's taxable profits, which can ultimately reduce your tax bill.
However, it's important to understand which expenses are allowed and which are not. In this article, we'll provide you with a comprehensive guide to what business expenses directors can claim.
Travel Expenses
Directors can claim travel expenses for business-related journeys. This includes:
Mileage - you can claim a tax-free rate of 45p per mile for the first 10,000 miles in a tax year, and 25p per mile thereafter
Public transport - train, bus, and taxi fares can be claimed
Hotel accommodation - if you need to stay away from home for a business trip, you can claim the cost of hotel accommodation
Meals - the cost of meals while on a business trip can be claimed, but only if they are necessary and reasonable
It's important to keep receipts and records of all travel expenses you claim.
Home Office Expenses
If you work from home, you can claim certain expenses related to your home office. These include:
Utility bills - a proportion of your household bills, such as gas, electricity, and water, can be claimed
Rent or mortgage interest - if you rent your home, you can claim a proportion of the rent. If you have a mortgage, you can claim a proportion of the interest payments
Council tax - a proportion of your council tax can be claimed
Internet and phone - you can claim a proportion of your internet and phone bills, but only for the part that is used for business purposes
It's important to keep accurate records of your home office expenses.
Equipment and Supplies
Directors can claim for equipment and supplies that are used for business purposes. This includes:
Computers and laptops
Printers and scanners
Software
Stationery and postage
Mobile phones and tablets
It's important to note that if the equipment and supplies are used for both business and personal purposes, you can only claim for the proportion that is used for business.
Professional Fees
Directors can claim for professional fees that are incurred as part of their role. This includes:
Accountancy fees
Legal fees
Insurance premiums
Entertainment Expenses
Entertainment expenses, such as taking clients out for dinner, are generally not allowed. However, there are some exceptions. For example, you can claim for:
Staff entertainment - such as a Christmas party
Refreshments - such as tea, coffee, and biscuits provided during a business meeting
It's important to keep accurate records of all entertainment expenses you claim.
Conclusion
As a director of a company, you are entitled to claim expenses that are incurred while carrying out your duties. However, it's important to understand which expenses are allowed and which are not. By keeping accurate records and following the rules, you can reduce your company's taxable profits and ultimately reduce your tax bill.
