expensesA brief summary of allowable business expenses

  • Company formation expenses
  • Accountancy fees
  • Business travelling expenses (must keep a record of when, where, why)
  • Postage and carriage for business purposes
  • Stationery
  • Telephone calls made for business purposes(And rental provided that the telephone is in the company name)
  • Mobile telephone purchase, rental and calls provided again it is in the company name.
  • Salaries paid
  • Employers NI contributions
  • Contributions to an executive pension plan
  • Business Entertainment (However it is not allowable against corporation tax)
  • Equipment purchased for business (inc items purchased before company setup and used in the business but must be at current market value)
  • Mileage allowances (currently 45p per mile for the first 10000 miles and 25p per mile thereafter). If the employee carries a passenger in their own car or van passenger payments of up to 5p per mile can be paid .
  • Note you can be reimbursed at a higher rate than this but the difference is taxable on the individual as a benefit in kind.
  • Computer software
  • Technical books and journals
  • Professional subscriptions (In most cases)
  • Use of Home as office (A standard allowance of £4 per week is given as a concession by HMRC)
  • Company bank charges and interest
  • Staff Entertaining (must be an annual event and not exceed over £150 per person attending including vat)
  • What are valid business expenses?
  • Meal Allowances
  • You can claim actual costs whilst away from the office. Round sum allowances are often set by HMRC for employees but daily round sum allowances are not allowed for the self employed.


You can claim for parking, congestion charges but not speeding fines or parking fines. The cost of using public transport (eg train, taxi etc) can be claimed providing you keep valid receipts


The cost of hotels or bed and breakfast accommodation can be claimed as an expense along with reasonable cost of evening meals taken in conjunction with the accomodation.


Ordinary clothing cannot be claimed (examples are everyday footwear, Business suits or clothes worn on religious grounds).


Providing it is relevant to the business training, work related and/or professional development, courses can be claimed


Sponsorship is an allowable expense for tax purposes provided it is incurred ‘wholly and exclusively for the purpose of the business. It may be disallowed where

  1. The main beneficiary of the funds provided is a relative of the sponsor
  2. The sponsor is involved with the beneficiary
  3. Where the sponsor cannot be seen to receive any benefit from the payment

Medical and Dental costs

These are not allowed for tax purposes under general principles however if it can be proved that the cost was necessary for the business (as opposed to personal wellbeing) the costs may be allowed (see Parsons v HMRC).