Far too many small businesses, particularly start-ups and sole traders, are paying tax on things they do not need to. Largely this comes from not understanding which business expenses are tax deductible. These business expenses are there for small businesses to exploit – so is there something your small business is missing?
Many costs to you or your employees incurred by your business are tax deductible. Expenses include cell phone bills for business calls, union dues, relevant magazine or periodical subscriptions, staff uniforms or business attire and memberships to relevant societies amongst others. Even if you are not currently using any of these services it may be worth looking into them knowing you can use them a little bit cheaper.
If you are renting your office space then this can be tax deductible; as can any bills for electricity, gas and other utilities. Replacement and repair of your office furniture, fixtures and fittings can also be claimed against. Insurance costs are another business expense relating to your premises. One thing to be aware of, especially if you are a sole trader, is that properties owned by you, as opposed to your business, cannot be claimed against.
Almost all office supplies are tax deductible so keep receipts for your pens, pencils, paper, printer ink, envelopes, postage stamps, paper clips and so on. The same goes for office equipment such as phones and fax machines. Claiming on everything listed here, and any other office supplies you have, can be an incredible savings for some small businesses because, despite being cheap individually, the money spent on all these little things will add up to a surprising amount.
While it is unlikely that individual company cars will be deductible, there is a number of vehicular expenses out there; hiring cars on business trips can be claimed against for example. Fuel for business use has a few extra stipulations too; it is deductible but only after a certain mileage has been reached and this depends on the type vehicle. Keep your gas station receipts but check the details with your relevant tax authority before making a claim.
Check any expenses you think you may be entitled to with the relevant tax authorities, your accountant or financial advisor.
About The Guest Author: Kevin Ball is a marketing executive working for The Accountancy Partnership, a company who specialise in accounting for small businesses and the self-employed.
Accountant Filling Out Tax Forms Photo via Shutterstock
Kevin, thanks for sharing these, it is good to be aware of this list as some small business owners may not be aware of expenses they may be entitled to.