tax breaks

List of Tax Deductions for the UK Businesses

A lot of businesses pay additional taxes which are unnecessary every year. This is because they fail to claim legitimate tax breaks. Small businesses face this issue more often as most businesses choose to do their own accounting without any professional help.

What are tax breaks?

You can claim your expenses or get tax breaks from HMRC if they are incurred for business purposes. HMRC devised many conditions that you need to fulfill to claim back the expenses. The general rule is that tax is deductible on items that are used exclusively for business purposes. Tax is not deductible on personal expenses.

We will look at some of the tax-deductible items. This will apply only to trade limited businesses.

Accommodation, supplies and other expenses on business premises

The essential items which include supplies and services used by you for business purposes are tax-deductible. For example, if you are travelling for business purposes, you can claim the cost of your visit which includes traveling and accommodation.

You can also get a tax break over the stationary items of your office which include typists, phones, papers, and other stuff.

Staff meals

You can get tax-free meals or at reduced rates. But you have to meet a few conditions first:

The meals are provided on the employer’s business premises. This may be the staff canteen.

  •         Either all staff can get a free meal or
  •         Your employer gives discounted meal vouchers

Pension contribution

If the employer is contributing to the pension of his employees, it’s not taxable. But they have to stay within some limits. You can visit GOV.UK to get information about annual and lifetime allowance. Employers pay into an employee’s occupational pension scheme or personal pension scheme.

Medical treatment on foreign trips

Your medical cost is not taxable if you are going abroad. If you are paying for the medical treatment as a business owner or your employer is paying, you can reimburse it. In case of any incident or medical emergency, the cost you bear for the treatment is not taxable.

Accountant cost

The fee of your employer fits the definition of wholly, exclusively and the necessary cost incurred for pure business purposes. So, the expenses are tax-deductible.

Christmas and other annual events

Christmas and other parties are exempted from the tax. You can get a corporate tax break on the Christmas related expenses if they are for the employees of the company. The cost should not go up from £150 per head to get the tax break.

Vehicle mileage

You can get a tax incentive for the fuel your vehicle consumes on the trips exclusively for the business. The cost for the cars is fixed at £0.45 per mile for the first 10,000 miles and £0.25 for every mile after that. For motorcycles, it is £0.24 per mile.

There are many other expenses that are tax-deductible and some of them include:

  •         Cost of your business mobile phone
  •         Business rental costs of the building
  •         Training courses
  •         Home used as a business office
  •         Business-related gifts
  •         Protective clothing, tools, and uniforms
  •         Bank loan interest for the business, etc.

Remember, all these expenses are tax deductibles if they are wholly, exclusively, and necessarily for business purposes. There are other items that you can explore by visiting GOV.UK platform.


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