What expenses can you claim?

It’s a tricky and complex economic time for businesses. Cash flow must be managed even tighter than before. Because of this, expenses have now come under the spotlight.

With many workers now donning the dressing gown instead of the suit and working from home, what expenses can now be claimed?

Expenses are more complicated than you think. What you can claim and more importantly what you cannot, adds to the issues of submitting an accurate tax return.  

The main questions are:

  • What are the main expenses that are claimable?
  • What can be claimed?
  • How they should be calculated?

The Golden Rule

The golden rule of expenses is to only claim for the expenses you incur which are wholly, exclusively and necessary during the everyday running of your business.

Home Office Costs as Expenses

If you have to work at or from home, you can get tax relief for the extra household expenses you will incur.

Typically, these extra expenses include:

  • The extra cost of gas and electricity to heat and light your work area
  • Business telephone calls
  • Interest on mortgages (not the capital aspect)
  • All other utility type costs

You can only claim flat rate expenses for working from home if you work there for at least 25 hours per month.

Expenses for Mileage

Similarly to home expenses, you can either claim a proportion of your actual motoring expenses or you can charge flat rate expenses as follows:

Vehicle 2019/20 and 2020/21 Amount per mile with simplified expenses  What you can claim if you do not or cannot used simplified expenses 
Cars and goods vehicles first 10,000 miles   45p  Capital allowances and running costs (for cars) or purchase costs (goods vehicles)
Cars and goods vehicles after 10,000 miles  25p Capital allowances and running costs (for cars) or purchase costs (goods vehicles)
Motorcycles 24p Full purchase cost and running costs 
Bicycles 20p Full purchase cost and running costs 

If you use the flat rate expenses you will need to keep a record of the number of miles you travel for business, but you will not need to keep track of your vehicle running and repair costs.

You can still claim all other travel expenses (for example train journeys and car parking) in the usual way.

Claiming Expenses for Mobile Phone Costs

Where an employee works regularly at home under agreed flexible working arrangements, an employer may now claim up to £4 per week, £18 per month or £216 per year with effect from 6 April 2012 without supporting evidence of the cost.

This includes:

  • Costs for phones you provide to employees
  • Reimbursing your employee’s own phone costs


What other business expenses can I claim?

There are many other expenses that you can claim for. All with their own rules, regulations and guidelines.

So how do you make sure you are claiming for everything available?

You need to maintain an accurate record of all expenses including VAT receipts where applicable. Doing this helps you justify your actions should your business expenses claims be queried by HMRC.

If you want to talk through how Parris & McNally can ensure you are claiming everything you are entitled to  please do not hesitate to visit our website www.parrisandmcnally.co.uk or contact lucy@parrisandmcally.co.uk