Limited Company Allowable Expenses

Tax legislation states that expenses can be claimed provided they are wholly and exclusively for the purposes of your business.

So what can I claim for?

The following is not a comprehensive list, however it will include the most common expenses that you can claim back.

  • Accountancy fees
  • Salaries paid to the contractor and the contractor’s spouse
  • Employers NI contributions
  • Business entertainment
  • Business travel
  • Business postage
  • Business stationary
  • Business telephone calls
  • Mobile phone and calls for business
  • Bank charges and interest
  • Business equipment
  • Mileage allowance or costs of running a car
  • Subscriptions to a relevant body
  • Allowance for use of home

Should I keep receipts?

Yes. You should keep all receipts that you make claims for as a business expense for a minimum of 6 years. Whilst your accountant may not need to see them, you are required by statute to retain records for this period of time.

Beware of companies who claim to have “special dispensations” with the Inland Revenue or who promote “expenses allowances” with no receipts required. You cannot claim for something that you didn’t actually pay for in the first place!

You will be personally liable for any underpaid taxes, NOT the company you are working for or taking advice from.

What if I’m inside IR35?

If you are caught by IR35 legislation, then the only expenses you can claim are:

  • Administration expenses – fixed at 5% of your contract income
  • Travel & Accommodation
  • Pension contributions
  • Professional subscriptions

If you would like further advice on umbrella services or setting up a Limited Company please call Kerry Pickersgill on 0161 968 8100 or email

Client introductions: we offer £75 for a new Limited Company and £50 for a new Umbrella

Reilly McMordie specialise in providing accountancy services for contractors throughout the UK. Established in 1985, we have extensive experience in the industry.

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Please contact us if you need further advice, have any questions about our services, would like a free consultation or a fixed fee quote.