Articles tagged with: allowable
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I’ve only just registered my business, can I claim pre trade expenses which I paid personally?
The basic principal is that “if you paid for something in the knowledge that you were starting a business, and the prime motive for buying this something was to enhance that business, then it is a business expense” and (subject to a three year time limit) you can claim for it. That applies to both goods and services, and in order to claim the full cost you must satisfy both parts of this test, that …
In order to establish what is a business expense, first we need to know “what is a business”?
A business is “an activity which is earnestly pursued with the objective of making a profit” as set out in the case of Customs and Excise Commissioners v Lord Fisher 1981.
And so it follows that a business expense is a cost which is incurred in order to increase the chances of that activity making that desired profit. If the primary purpose of incurring an expense is not to help the business to make …
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Pretending you’re an employee again!
If you have ever been employed and had to submit expense claims, you will be familiar with this process. Now that you’re a director of your own limited company, you need to follow the same sort of process that regular employees have to follow. It’s done this way, because you are trying to keep corporate matters corporate and private matters private!
The best thing would be to get all your suppliers to bill the company directly, …
The Self Employed
We are often asked about the sorts of things that self employed businesses can claim for, in order to reduce their tax bills. Unhelpfully, UK law says that “you can claim for expenses incurred in the course of running your business” and there is no further explanation! The reality is that a working practice has evolved and both the tax office, and accountants as a whole, have a feel for what is right.
When you start in business, the best approach is to record everything. The example profit and …