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Five Things That You Didn't Know Were Tax Deductible

Updated: Jul 5

Monday 18th March 2024





It’s important that Limited Companies pay the right amount of tax each year to avoid fines and penalties from HMRC. 


Knowing what business purchases are tax deductible and exempt from tax can help Limited Companies and Small Businesses save a significant amount of tax, which can be reinvested into their business.


CLOTHING:

Although your business cannot claim tax relief for clothing that is part of your everyday wardrobe, it could benefit business expenses for uniforms, protective clothing, and any clothing worn solely for work. Additionally, any cleaning or repair costs are also covered.


As an employer, even though you do not have to pay tax on most uniforms or clothing worn for work, you may still have to expense these to HMRC. 


PARTIES:

Your Limited Company can claim its festive or annual party as a deductible expense!


As long as your social party is open to all employees, is an annual event such as a Christmas Party or Summer Barbeque, and costs £150 or less per person, your party is tax-exempt!


If you meet all of the above criteria, you don’t need to report anything to HMRC! 


DECORATING:

Office maintenance, repairs, and redecoration are all allowable tax deductions as long as they are not part of a bigger project for improvement. The costs of a painter, decorator, materials such as paint and wallpaper, and equipment, are likely to be allowable expenses too.


 If you work from home, you may be able to claim a proportion of relevant property repairs and home improvement purchases that have been made solely for your professional duties. If you are unsure, you can always speak to your accountant.  


CHILD CARE:

If you are an employer and provide childcare to your employees, the workplace nursery is likely to be tax-exempt.


HMRC say that ‘if you provide places for employees’ children in a workplace nursery, to be exempt, it must:


-Have the appropriate registrations and approvals

-Be available to all your employees

-Provide childcare for your employees’ children they have parental responsibility for

-Provide childcare up to the maximum age its registration and approval allow for  


The nursery does not need to be located at the workplace.


TRAVEL:

You may already know that mileage and some travel expenses are tax deductible, but did you know that any accommodation, food, and drink costs you incur while away from your permanent workplace are tax deductible too?


You cannot claim for travel to and from work but you can claim tax relief on money you’ve spent on public transport, hotel accommodations, tolls, parking, business calls, and food while away for business purposes.  



In conclusion, navigating the realm of tax deductions requires attention to detail and awareness of the myriad expenses that may qualify for tax relief. While some deductions are well-known and widely utilized, others often fly under the radar. Recognising these overlooked deductions can lead to substantial savings and a more efficient tax strategy.


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