Nobody enjoys paying tax. But what’s worse than paying tax is paying more than you actually owe, and that’s exactly what thousands of small business owners across the UK are doing every single year, simply because they don’t know what they can claim.
The good news? With a bit of knowledge and some simple habits, you can reduce your tax bill legally and legitimately. Here are some of the most commonly missed expenses that small business owners forget to claim.
Your phone bill
If you use your personal phone or home broadband for work, and most small business owners do, a portion of that bill is claimable as a business expense. If you’re a Limited Company get the contract in the business name. Sole trader, you can claim a percentage of the overall bill as a business expense.
Mileage
This is one of the most consistently underclaimed expenses we see. If you drive for work,to meet a client, attend a networking event, pick up supplies, or travel to a co-working space — you can claim 45p per mile for the first 10,000 miles in a tax year. That rate is set by HMRC and applies whether you have a business vehicle or use your personal car.
The problem is most people simply don’t track it. A quick note in your phone or a simple mileage app every time you drive for work can add up to a meaningful saving by the end of the year. You can’t claim mileage if its to your regular place of work, so if its an office you to go every day, that’s a no unfortunately!
Your home office
If you work from home, even part of the time, you may be able to claim a portion of your household bills against the business. This can include heating, electricity, and broadband costs based on the proportion of your home used for work and the amount of time you work there. There is also a simplified flat rate option available if you prefer to keep things straightforward. Again, this varies sole trader vs limited company, so chat to an accountant for your best route.
Training and professional development
Any training that is relevant to your current business,courses, books, webinars, industry memberships, professional subscriptions, is potentially claimable as a business expense. The key test is that it must relate to your existing trade, not train you for a completely new one.
Your accountant’s fees
Yes, even this counts. The cost of professional advice, including accountancy fees, tax advice, and bookkeeping support, is a legitimate business expense. So investing in good financial support actually costs you less than the headline figure suggests.
Software and subscriptions
Any software you use to run your business, your invoicing tool, project management system, design platform, scheduling app, or bookkeeping software, is claimable. Go through your subscriptions and make sure everything with a business purpose is being recorded as an expense.
The habit that makes all of this work
The mistake most small business owners make is leaving everything until the end of the year and trying to piece it together from bank statements. By that point things get missed, receipts are lost, and the process is stressful.
The simpler habit is to record expenses as you go. Even a basic spreadsheet updated weekly, or a bookkeeping app that lets you photograph receipts on the go, will make a significant difference to both your tax bill and your stress levels at year end.
Small things add up to a real difference. And that difference is money that stays in your pocket rather than going to HMRC.
Not sure if you’re claiming everything you’re entitled to?
At 2 Sisters Accounting we work with small business owners to make sure they’re not overpaying tax and that their finances are working as hard as possible for them. If you’d like a fresh pair of eyes on your expenses and tax position, we’d love to chat.
