Tax deduction for starting a business

One question we get asked frequently at Fusion, by entrepreneurial business owners, is how they can get maximum tax relief when setting up a Limited Company.

Most businesses have initial set up costs in the form of office equipment or legal expenses which can be classified as business expenditure.

If expenditure is paid for personally prior to trading, the directors of the entity can claim this expense as a reimbursement as soon as the company has been formed. As such, office equipment, for example, is eligible for capital allowances through the corporation tax return.

Insurance costs

Business insurance expenses are a fully reclaimable cost through your Limited Company, and entities can claim the cost of insurances if they are strictly used for business purposes. Allowable expenses include:

  • Public liability insurance
  • Contents insurance
  • Professional indemnity insurance

Travel and subsistence costs

Business travel and subsistence costs such as accommodation costs, reasonable food and drink costs and business mileage are all claimable expenses.

There is a HMRC approved scheme for claiming mileage, and we always recommend keeping a mileage log as an easy way to reclaim travel costs.

Phone bills

With many of us working out of home offices, utilities such as phone and broadband bills can be claimed through the company.

If you have a mobile phone contract in the name of your company, and it relates solely to the business, this can be claimed as a business expense.

From the above examples, there are several expenses that can be claimed for a start up business, and many business owners that we speak to overlook many of these.

Speak to our team to get your accounting records updated, and to look towards a more tax efficient structure.

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