The tax return deadline is in just over 2 weeks and many will be panicking and confused about what can and can’t be tax-deducted. Knowing what can and can’t be written off is a huge part of building- and keeping- wealth.
Many tax breaks target small and specific groups such as start-ups and tech companies. In order for an expense to be written off you must be able to prove it is ‘ordinary and necessary’.
Here are some tax write offs you probably don’t know about.
Contractors and Freelancers
Renting a house near the workplace
If you’re an independent contractor, almost all of the expenses for renting a flat or house near the work place are claimable. This is claimable on the terms that you keep your primary residence.
Gadgets you use for business
iPads, tablets and any other gadgets that are necessary for you to do your job properly are all claimable.
Travelling to work as a passenger
If your commute involves travelling as a passenger in a car, you are entitled to claim 5p per mile.
Trade Industry Membership Fees
If you belong to a trade organisation in your industry, you can deduct fees involved.
Staying overnight on business with friends and family
If you stay over a friends or family home whilst on business, you are still able to claim the expense.
Paying the HMRC early
If you pay your Corporation Tax bill early the HMRC will give you some of the money back in the form of interest.
Celebrating with work at Christmas time
Any staff party/ staff entertainment/ staff celebration costs are tax deductible at Christmas time. This is as long as the annual cost of staff functions is kept under £150 a head.
Decorating your office
If you’ve decorated your office it could be tax deductible. This includes the costs of paintings, antiques that you use to decorate areas, which will be seen by clients and the general public. To claim this expense you will have to make a business case for these expenses. Larger items will only attract relief under capital allowance system, but it can definitely be worth looking into.
Claim research and development tax credits
Expenses incurred due to business innovation can be eligible to claim. Taking advantage of this tax exemption can result in a deductible expense of up to 225% of costs incurred.
Tax write-offs for video game companies
If your tech company makes video games that are ‘culturally British’ you may be eligible to claim relief. Points are awarded depending on how much of the development was carried out in the UK, whether the game was developed by UK staff and whether at least half the team is from the UK.
Employee share options and awards
If you incentivize your staff with share options or share schemes, you may be eligible to claim corporation tax relief.
For more advice on UK tax contact us now