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Expenses FAQs

Expenses FAQs

What expenses can I deduct from my business income?

You are allowed to claim any expenses which are “wholly, exclusively and necessarily” incurred in the conduct of your trade and profession, so, in effect, all business related expenses.

Are entertainment expenses allowable?

Unfortunately there is no such thing as a tax-free lunch, and no tax or VAT is reclaimable on entertainment costs.

Do I need receipts for all expenses I wish to claim or are round sum allowances possible?

You cannot claim round sum allowances, and you must retain evidence of any expense you wish to claim.

Should I transfer my personal car to my business, and make it a business car?

In the old days this was a popular way of claiming additional tax relief by putting your car running costs through the business. However there are associated costs now with running a car through your business, so we would have to make an assessment of that on your behalf, dependent on your own individual circumstances.

Can I pay a salary to my spouse?

Again, this was a popular way of reducing tax in another era, but is much more closely scrutinised these days. We would need to look at each case on its own merits and advise accordingly (unless of course your spouse does indeed work full or part-time for your business, in which case there is no problem in paying a salary).

How long does it take to organise the VAT and Corporation tax registration?

These registrations will normally be in place around 4-6 weeks after company registration.

Can I start my new career immediately?

Yes you can, you can start work while waiting for the appropriate registrations to come through.

What happens if I have been out of work before starting my new career?

If you have been claiming unemployment benefit, you need to sign-off and ask for a P45 from the Unemployment Benefit office. If you have not been claiming benefit you need to provide us with the P45 from your most recent employment, even if that was some time ago. If you have neither of these, we can still get you started, so don’t worry!

I have just arrived in the UK from overseas to start a business, what difference does that make?

Assuming you have the right to work in the UK (e.g. EC citizen; British descendant) then the main issue is that you will not have a National Insurance number or a previous tax history. We can complete the relevant paperwork to create a tax record for you, however you will have to personally obtain a national insurance number as this cannot be done on your behalf. You need to contact your local Inland Revenue office to do this – full guidance will be given if this is relevant to you.

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