This article covers the types of expenses that you can claim s a contractor when running your own UK limited company .

1. WHAT TYPE OF EXPENSES CAN BE CLAIMED AS BUSINESS EXPENDITURE
A business expenses is one where the cost is incurred wholly, exclusively and necessary for your
business according to HMRC’s guidelines. Therefore, you should record all of the expenses and costs
that you incur in the cost of running your company.
The expenses that you can claim will also be both ones that are chargeable to customers/clients and
non-rechargeable.
You should obtain and retain receipts or invoices wherever possible and these can be from a
shop/business as well as online.
You need to be aware of any expense that has a `duality of purpose’ –this is where there is both a
business and personal element such as a trip abroad which is part business / part holiday. If there is
any suspicion that the expenses may not have occurred if it were not for the personal element it
could be disallowed.
The types of expenses that are generally allowed are:
 Business travel and accommodation (this can include hotels or B&B’s or even a temporary
rented accommodation and various utility bills) –subject to the 24 month rule

2.  Meals and subsistence when working away –subject to the 24 month rule
 Personal Incidental Expenses (PIEs) when staying away from home overnight for work -
reasons -£5 per night in the UK and £10 per night outside the UK –this cost is to cover sundry
type expenses such as phone calls home, coffees, laundry etc
 Other travelling expenses when travelling to other locations for business reasons other than
your normal place of work such as attending interviews, visiting the bank or accountant,
attending training courses and seminars, trips to buy company supplies etc
 Mileage in your private vehicle at HMRC allowed rates -45p per mile for the first 10,000
business miles and 25p per mile for each mile thereafter. You can also claim mileage for
travel in your private motorbike (24p per mile) or private bicycle (20p per mile)
 Motoring expenses using fixed rate allowances (e.g. claiming the distance travelled)
 Entertaining costs however if these are for entertaining past, present or potential future
clients they are not tax-deductible however it is better that your company pays for these
rather than you personally
 Salaries for all company staff (normally yourself and perhaps your spouse)
 Company pension scheme contributions
 Employer’s N.I. contributions on salaries above the NI threshold
 Business telephone calls
 Mobile telephone and calls
 Broadband charges
 Postages and stationery, business cards
 Bank charges and interest
 Printing costs
 Annual eye test cost and cost of spectacles if you use these for work
 Computer equipment purchased for business purposes such as desktops, laptops and other
office type equipment
 Computer software

3.  Technical books and journals
 Advertising and marketing including the cost of setting up and running a website for your
company
 Local business sponsorship if it can benefit your business
 The cost of professionally updating your CV and LinkedIn profile and other social media
advertising
 Professional training courses if connected to your contract work
 Certain professional subscriptions to professional organisations and institutions
 Magazine/newspaper subscriptions –if connected to your contract work
 Annual £13 fee to Companies House for filing the Confirmation Statement. Any other
Companies House fees when certain changes are made such as changing the company name
 Business gifts –up to £50 per gift –subject to certain conditions
 Use of home as office –under HMRC allowed rates you can currently claim £4 per week –you
may be able to claim more if you can justify that your household running costs come to
more than £4 per week for running your business from home
 Annual event of up to £150 per employee –typically your annual Christmas dinner
 Business insurance such as professional indemnity insurance
 Relevant Life insurance –this can be as much as 50% cheaper when you pay via your
company compared to paying this personally
 Income protection (to provide you with income if you cannot perform your contract work for
a period of time)
 Accountancy fees –typically a monthly payment plus any one-off fees
 Legal and other professional fees in connection with business related issues
 Relocation costs –up to £8,000 and subject to certain conditions
 Any company formation costs

4.  Charitable donations –subject to certain conditions