Allowable expenses (sometimes referred to as revenue or trading expenses) are anything which has been incurred “wholly and exclusively” for the purpose of your business. This means that any expenses you’re wanting to claim for must have been used for either the purpose of running or expanding (e.g. advertising) your business.
HMRC Guidance (BIM37007) states:
The legislation disallows any expenditure not incurred wholly and exclusively for the purposes of the trade, profession or vocation. This means that the rule is only satisfied if the taxpayer’s sole purpose for incurring the expense is for the purposes of their trade, profession or vocation. If you identify a non-trade purpose then the expenditure is not allowable.
Important: Claims for business expenses which have not been incurred as part of your business are classed as tax fraud and is against the law.
If you’re in any doubt, check before claiming.
List of Allowable expenses
We haven;’t provided a full list of allowable expenses, as the list could be endless – anything which your business purchases, with the sole benefit for the business, generally can be accepted as an allowable expense.
Our tax guide will help you to find the relevant expenses through our dedicated section which provides guidance on how to log expenses, and what can be claimed in these categories.
Alternatively, use the search function in our tax guide – e.g. ‘stationery’, ‘hotel’ or ‘rent’.