Business expenses you can still claim before the end of the year
Most business owners spend the last few weeks of the year chasing invoices, finishing client work or trying to hit a final sales target. Tax planning usually gets pushed to the bottom of the pile. But this is actually one of the better times to sit down and look at what you’ve been claiming, because a bit of housekeeping now can make a real difference to your tax bill later on.
We speak to sole traders, partnerships and limited companies every week at Affinity Associates, and it’s surprising how often people are sitting on legitimate expenses they’ve forgotten about, or didn’t even know about. Sometimes it’s a subscription running quietly in the background, or a receipt shoved in a drawer months ago and never logged. Either way, it’s worth catching before the year closes.
Why it's worth doing now
HMRC’s rule is that a cost has to be “wholly and exclusively” for your business before it counts as an allowable expense. Claim correctly and you only pay tax on your actual profit rather than everything you’ve earned. Miss things off, and you’re either paying more tax than you need to, or risking a query from HMRC if a claim doesn’t stack up. Their own guidance on this is at gov.uk/expenses-if-youre-self-employed and it’s worth a read if you handle your own books.
So here’s what’s worth checking.
Office and admin costs that get missed
These are the small, everyday costs that quietly add up over twelve months.
- Stationery, printing and postage
- Phone and broadband bills, or the business share of them
- Software subscriptions, from accounting tools to cloud storage
- Bank charges and interest on business loans or overdrafts
- Professional indemnity or public liability insurance
If you signed up for new software this year or upgraded a phone contract, it’s worth double checking it’s actually been logged. This is one of the easiest things to leave out.
Travel and vehicle costs
Business travel is probably the most underclaimed category out there, mainly because people don’t keep a running note of it as they go.
- Fuel, parking, train and bus fares for business journeys
- Hotels and reasonable food costs when travelling for work
- Vehicle running costs, either through mileage or actual expenses
If you use the mileage method, you can claim 55p per mile for the first 10,000 business miles in a tax year, then 25p per mile after that. It’s a straightforward way to do it and saves you having to split every fuel receipt.
Staff costs and professional fees
If you employ anyone or bring in outside help, remember to include:
- Salaries, wages, pension contributions and employer’s National Insurance
- Subcontractor payments
- Recruitment costs
- Fees paid to accountants, solicitors or other professionals for business matters
That last point catches people out a lot. If we’ve helped you with anything this year, from a VAT question to restructuring the business, that fee is very likely claimable.
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Working from home
If you regularly work from home, you can claim a share of your household costs such as heating, electricity and council tax, based on the space and time you use for work. There’s also a simplified flat rate available if you work 25 hours or more a month from home, which saves you working out exact percentages. It’s usually a smaller claim than people expect, but it still counts.
Equipment and the annual investment allowance
Bought equipment this year? A laptop, machinery, office furniture? You may be able to claim the full cost against your profits in the same year through the annual investment allowance. It currently covers spending of up to £1 million, which is more than enough for most small and medium sized businesses. You can check the current figures at gov.uk/capital-allowances/annual-investment-allowance.
Timing matters here too. Buying equipment just before or just after your year end can change which tax year the relief lands in, so it’s worth a quick think before you make a purchase.
Marketing, training and subscriptions
A few more areas worth checking:
- Advertising, website costs and social media promotion
- Trade body or professional membership fees
- Training that maintains or improves skills you already use in your work
One thing to flag though. HMRC generally won’t allow training for a completely new skill or a new line of business, only for keeping your existing skills up to date. If you’re not sure where a course falls, ask before you claim it rather than after.
What you can't claim
It helps to know where the line sits too, so you don’t overclaim by accident.
- Personal expenses with no real business purpose
- Client entertainment, though staff entertainment is often allowable within limits
- Fines and penalties, including parking tickets
- The personal portion of anything used for both business and personal life
A quick checklist before you file
Set aside an hour before your year end and:
- Pull together your receipts and invoices, digital copies are fine
- Reconcile your bank statements against what you’ve recorded
- Look back at any large purchases and whether the annual investment allowance applies
- Check mixed use costs like phone bills and home working have been split properly
- Confirm professional fees, insurance and subscriptions are all accounted for
Getting this right doesn’t just lower your tax bill. It also means your records hold up if HMRC ever asks questions. For deadlines and filing details, gov.uk/self-assessment-tax-returns is a good place to check.
Let us take a look
The list above is a starting point, and every business looks a bit different once you dig into the details. What counts for a freelance designer won’t necessarily apply to a small manufacturer, and that’s exactly why a proper review pays off rather than working from a generic list alone.
If you’d like a second pair of eyes on your expenses before the year ends, or you just want to be sure nothing’s slipped through, get in touch with Affinity Associates. Book a complimentary consultation and we’ll go through your figures together, so you head into the new year with things properly in order and one less thing to worry about.
Author
Mukund is a founding member of the Affinity Associates Group and has been with the practice for nearly 40 years. After completing his degree in Accounting and Finance, he went on to qualify with both ACCA and ICAEW in 1991. Over the years, he’s built deep expertise in consultancy, tax, business development, and corporate group structures. Mukund is known for helping clients make sense of complex financial challenges and turning them into opportunities for sustainable growth.
