Do you run a limited company? Have you ever wondered if you are claiming all the relevant expenses for your business without incurring any taxable benefits for yourself as director and/or your staff?
Here are some of the lesser known limited company expenses that you could be claiming:
You can spend up to £150 per head per tax year on Christmas parties or annual functions. This allowance also applies to any ‘partners’ invited along. You don’t have to hold one event, it can be spread over several events, as long as it does not exceed £150 including VAT. Costs can include food, drink, tickets to events, accommodation and taxi fares. To be non-taxable on the staff all events must be open to ALL employees.
If you use homeworkers for your business, you can pay them up to £4 per week towards household costs (£18 per month for monthly paid employees).
Incidental overnight expenses can be paid if you or your employees stay away from home on business. To be non-taxable the payment can’t exceed £5 per night in the UK and £10 per night overseas. This is in addition to the cost of hotels/meals.
If you or your employees need to have an eye test and corrective glasses to ensure that they can do their job safely, this is an allowable expense. However, glasses should only be used for work purposes. For example, if you need glasses to use your computer, then don’t wear the glasses when watching television. Although, in practice, it’s unlikely HMRC would find out.
Relocation expenses up to £8,000 per move in connection with job-related residential moves are not taxable. To claim the director/employee must be moving house because they have either started a new job; started performing new duties at their job or changed the place where they normally work.
Subscriptions to professional bodies are not taxable provided that the employee has a contractual or professional requirement to a member of the body.
Lending or hiring a bike to an employee isn’t a taxable benefit assuming that it is mainly used for getting to and from work. There is the Cycle To Work Scheme which is available to employers.
You can give yourself/your staff a Christmas gift without it being taxable providing all the following conditions are met:
- It costs £50 or less to provide;
- It isn’t cash or a cash voucher;
- It isn’t a reward for work or performance;
- It isn’t in the terms of contract.
Relevant life policy
Usually, life insurance premiums are a taxable benefit if the company pays these on behalf of the director and/or staff. However, there is one type of policy, called a Relevant Life Policy, that can be paid for by a company and is both allowable for corporation tax purposes and a non-taxable benefit. You will need to speak to a Financial Adviser about these products.
If you would like more information on these or other limited company expenses, please get in touch.