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Bookkeeping Tips - Allowable Business Expenses

A lady working at her desk calculating her business expenses

When it comes to completing your tax return, ensuring you claim every allowable expense is crucial. These deductions can significantly reduce your taxable income, meaning more money stays in your pocket. However, many businesses overlook key expenses that they’re entitled to claim. To help you avoid this mistake, here are some essential bookkeeping tips to ensure you don’t leave money on the table.


Why Keeping Track of Allowable Business Expenses Matters

Accurate record-keeping isn’t just about staying compliant with HMRC; it also ensures you’re making the most of every tax-saving opportunity. Forgotten expenses often occur due to a lack of organisation or simply not knowing what qualifies as a legitimate business cost. Regularly updating your bookkeeping records can prevent this and help you spot opportunities to save.


Forgotten Expenses You Can Claim

Here are some commonly overlooked expenses that you might be eligible to deduct:


1. Home Office Costs

If you work from home, even part-time, you can claim a portion of your household bills. This includes:

  • Electricity, gas, and water

  • Internet and phone bills

  • Mortgage interest or rent

The amount you can claim depends on how much of your home is used for business and how long you work there. HMRC also allows a flat rate option to simplify the process.

2. Business Mileage

While many business owners claim for travel expenses, they often forget to include mileage for smaller trips, such as visiting clients or picking up supplies. Remember, you can claim:

  • 45p per mile for the first 10,000 miles

  • 25p per mile thereafter

Keep a detailed mileage log to ensure accuracy.

3. Professional Development

Investing in your skills is an investment in your business. Courses, workshops, webinars, and even professional books related to your trade are deductible expenses. For example, a small business owner attending a bookkeeping tips seminar can claim the registration fee and related travel costs.

4. Subscriptions and Memberships

Professional memberships and subscriptions that are directly related to your work, such as trade journals, online tools, or association fees, are often forgotten. For instance, an accountant subscribing to tax software or an artist paying for a design tool can include these as allowable expenses.

5. Mobile Phone Usage

Do you use your personal phone for business? You can claim a portion of your phone bill based on how much it’s used for work. A simple way to calculate this is by tracking your usage for a typical month.

6. Small Office Supplies

It’s easy to forget about the little things, but pens, notebooks, printer ink, and postage costs can all add up. These everyday essentials should be logged and claimed.

7. Bank Charges and Loan Interest

Business bank account fees, overdraft charges, and interest on business loans are allowable expenses. Don’t forget to check your bank statements to identify any eligible charges.

8. Marketing and Advertising

Whether it’s paying for social media ads, printing flyers, or maintaining a website, these expenses are crucial for growing your business and are fully deductible. Even the cost of hiring a professional to manage your advertising campaigns can be claimed.

9. Uniforms and Protective Clothing

If your business requires specific clothing, such as branded uniforms or protective gear, these costs are tax-deductible. Just ensure that the items are used solely for business purposes.

10. Childcare Costs

While not directly a business expense, many sole traders overlook tax-free childcare schemes that can ease the financial burden while they work. This isn’t claimable on your tax return but can be a valuable resource.


Tips for Tracking and Claiming Expenses

Now that you know what to claim, here are some bookkeeping tips to ensure nothing gets missed:

  1. Use Digital Tools Apps and software like QuickBooks or Xero can help you track expenses in real-time. Many platforms also integrate with your bank account, making it easier to categorise transactions.

  2. Keep Receipts HMRC requires proof for all claims, so make it a habit to keep receipts. Snap photos of paper receipts to avoid losing them.

  3. Separate Personal and Business Finances A dedicated business bank account simplifies tracking and reduces the chance of missing eligible expenses.

  4. Review Regularly Schedule a monthly review of your expenses. This prevents any last-minute scrambles during tax season.

  5. Consult a Professional Bookkeepers and accountants are experts at spotting missed opportunities. Their knowledge of tax laws ensures you’re claiming everything you’re entitled to.


Need More Help? Let’s Talk

Keeping track of expenses can be overwhelming, but you don’t have to do it alone. At Bay Bookkeeping Solutions, we specialise in helping sole traders and small limited companies stay on top of their finances. Whether you need help with daily bookkeeping or preparing your tax return, our friendly and professional team is here to assist.


Contact us today for more personalised bookkeeping tips and advice. Together, we can ensure you’re making the most of every opportunity to save.


By following these tips and being mindful of commonly forgotten expenses, you’ll not only maximise your tax savings but also gain better insight into your business’s financial health. Ready to take the next step? Get in touch with us now!

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