Earlier this week, I had the pleasure of joining Enterprise Nation for a Lunch & Learn session where I shared practical guidance on business expenses—an essential topic for any entrepreneur aiming to stay compliant and financially savvy.
If you missed it, the recording is now available to watch here.
Here’s a quick recap of the key points we covered in under 500 words:
What Qualifies as a Business Expense?
- Wholly and exclusively: HMRC defines allowable expenses as those incurred “wholly and exclusively” for business purposes.
- Dual-purpose items (like suits or childcare) typically don’t qualify, even if they support your ability to work.
Obvious vs. Less Obvious Expenses
- Obvious: Legal fees, advertising, wages, rent, utilities, and office supplies.
- Less Obvious: Training (must relate directly to your trade), home office use (based on time and space), and travel (commuting not allowed).
Entertainment & Gifts
- Staff parties: Up to £150 per head per year is allowable and VAT-reclaimable.
- Client entertainment: Not tax-deductible.
- Trivial benefits: Up to £50 each and £300 annually per person, ideal for small non-cash gifts.
Travel & Home Office Use
- Mileage claims: Valid even for bike travel.
- Home office: Portion of household costs can be claimed based on usage.
Pre-Trading & Professional Costs
- Pre-trading expenses and relevant professional memberships (like RIBA or Data Management Association) are deductible once trading begins.
- Books, subscriptions, and industry-related materials are generally allowable.
Record-Keeping & Compliance
- Good habits = smart business. Use apps like Xero or FreeAgent to track receipts.
- Match expenses to bank entries and categorize them consistently.
- Keep records for at least 6 years.
From Compliance to Strategy
- Treat expense tracking as strategic insight. Review spending trends, cut unnecessary costs, and align expenses with business goals.
When to Involve a Professional
- Doing it yourself is possible—but knowing when to bring in an expert can save money, stress, and time in the long run.
Watch the full webinar here
Questions or want to explore how this applies to your business?
I’d love to hear from you. Reach out via Linkedin, or try our free Business Scorecard for a quick diagnostic on your financial health.