Starting a business
Starting your own business has its merits as you can save a lot of money by claiming expenses on some of the costs. It’s a great way to relieve some of the pressure on the company. Businesses generally pay taxes on their profits, so if you deduct some of it as expenses, you will pay lesser taxes. Just remember, if you want to claim expenses, make sure to always have proof, bills
What is deductible?
Not all costs are deductible. In order for an expense to be deductible, it has to be very common and a necessity. Common expenses include but are not limited to phone bills, uniforms, and advertising, while necessities can be goods you buy and sale.
Work from home
If you are working from home, you can claim several interesting expenses. If you are using a room strictly for business purposes, you can claim that part of the rent as an expense. Example: Your home’s area is 60m2, it has 3 rooms, of which the smallest one is pure business related and is 6m2. If you pay rent to let’s say £300, you can claim 10% (60/6) of it, so £30 as a business expense.
Additionally, you need healthy conditions to work in, so it’s only natural that those conditions are met. If it’s winter, you need heating, during winters you need the heat. These expenses can also be claimed. As you are working from home, it’s implied you need to be online to work. Electricity used by your computer, modem and other apparatus in the house is also claimable.
Another useful expense could be on the internet. If your job requires you to use the internet for business purposes, perhaps you can lower the bill a bit. The same thing with your phone, calls related to work could also be claimed as business expenses.
Companies have a different set of expenses. A most common one is for commuting, whether it’s by car, motorbike or other means. You can claim fuel you use to travel to work and back home as a business expense. Public parking that keeps your vehicle safe while you work is also a claimable expense. If your city has buses or trains, you can claim tickets for the rides.
If you are using a laptop to work, you can buy it in the name of the company. Technically it would be company asset, but you will have complete control of its whereabouts and usage. Printing paper, ink for the printer, pencils and similar office supplies are also mandatory for companies while being claimable.
You can even claim a suit, but only if it’s a rental used for important company parties… And while on the subject of parties, you can even claim for food and drinks. There is a twist to this though; it cannot exceed the cost of £150 per person.
Organizing your company is a big task, so leaving some unimportant stuff to professionals can be very helpful. Some waste collection companies in London, such as HandyRubbish will take care of all the waste you make, in a quick and precise fashion. They are extremely flexible, which means that you can make a deal that suits your needs. Not only do they remove the junk, but they also recycle it or re-use it if possible. Their motto is “Rubbish won’t come in handy, but we will!”
Hiring an experienced marketing team that will make your commercial stand out will likely make your business recognizable worldwide. Proper advertising includes newspapers, radio and website ads. Each of these appeals to different audiences, and using all of them gives you a better chance of them hearing about your company.
All these services could be claimed as an expense.
Digitalising the data
As your company is growing, it might become difficult to keep everything in check. There could be hundreds or even thousands of claims. So, how can you keep track of all of them? By using apps. Modern times have reached new standards and you can keep all expenses safely stored on your mobile phone. Using these apps is not only faster and more economical, but their built-in code can scan for duplicates, making them a better choice in nearly every way. The most popular ones are Rydoo, Zoho, American Express Spend Manager, and Shoeboxed.
One important thing to note is that if you are not paying attention, you can quickly rack up debt. Every claim you file has to be properly organized, which means having the paper, a receipt or other physical proof. Failing to display all of them in a timely fashion will require you to pay all of that money back.
If you are using the money to buy machinery or make improvements to your work you can claim a capital allowance. It’s similar to expenses but different and it’s usually very complicated. Example: Buying a car counts as an allowance, but the fuel needed to drive it is an expense.