Expenses Guide – By ACCOTAX
Last updated: 18 October 2026
Limited company expenses: what your company can claim in 2026/27
Allowable expenses reduce your company’s taxable profit. That saves Corporation Tax at 19% to 25%, and up to 26.5% in the marginal relief band. A cost must be incurred “wholly and exclusively” for the business. Some expenses also create a benefit-in-kind for you as a director, so check the rules before you claim.
Salaries and pensions
- Directors’ and staff salaries are deductible. Employer National Insurance (15% above £5,000 a year) is also deductible.
- Employer pension contributions are usually deductible and have no National Insurance on them. That makes them one of the most tax-efficient ways to take money out of the company.
Travel and mileage
The company can pay you 55p a mile tax-free for the first 10,000 business miles in your own car (25p after that). The 55p rate applies from 6 April 2026. Train fares, hotels and meals on business trips are allowable. Travel from home to a permanent workplace is not.
Working from home
The company can pay you £6 a week (£26 a month) tax-free towards extra household costs when you work from home under a homeworking arrangement. Higher amounts need evidence.
Equipment and capital allowances
Laptops, machinery and vans usually qualify for the £1 million Annual Investment Allowance or full expensing. From April 2026, the main pool writing down allowance is 14%. Electric company cars still qualify for a 100% first-year allowance.
Other common expenses
- accountancy, legal and professional fees;
- office rent, software, phones and broadband;
- business insurance and bank charges;
- trivial benefits of up to £50 each, capped at £300 a year per director;
- an annual staff party of up to £150 per head;
- training related to the business.
See our full list of allowable expenses for more.
What isn’t allowable
Client entertaining, fines, personal clothing and private costs are not deductible. Paying personal bills from the company account goes on your director’s loan account, and that can lead to extra tax.
Limited company expenses FAQs
Can my company pay for my mobile phone?
Yes. One mobile phone contract in the company’s name is a tax-free benefit.
Is private medical insurance allowable?
It is deductible for the company but is usually a taxable benefit for you. Read is private medical insurance an allowable expense?
Do I need receipts?
Yes. Keep records for at least 6 years from the end of the company’s financial year.
Make sure your company claims everything it should. Our limited company accountants review your expenses as part of a fixed monthly fee. Read our limited company guide, or call 0800 644 1258.