If you own a business you have an obligation to pay the exact amount of tax you are liable for to the HM Revenue & Customs. There are several ways in which you can take advantage of legitimate tax breaks and include deductible business expenses as part of your tax returns each year however.

If you have taken on an expense that is ‘wholly, exclusively and necessarily’ taken on due to the running of your business and is not being used for personal use alongside your business use, it is usually tax deductible. We would always recommend that you speak to an accountant to check that you are paying the correct level of tax, but also that you are making the most of allowable tax expenses.

Here are just a few of the expenses you can claim as a small business owner.

An Office at Home

If you work from home regularly you can claim a small tax deduction of £4 per week without having to provide any receipts, itemised billing or other types of documentation to prove the expenses involved. If the cost of your home office is large then you can make larger claims, as long as you can clearly demonstrate a percentage of that room being used for business purposes only. You can work out the number of hours that work takes place, and then work out the expense from there, using the same ratio to work out utility costs.

Telephone Costs

If you use a phone at all for business you can claim expenses. A home landline that is used to make business calls can be used to make tax deductible claims against the specific calls as itemised in your phone bill. All other charges cannot be claimed. An office landline is fully deductible as long as the bills are issued to the business rather than the individual. The same applied with mobile phone and broadband contracts, which can be claimed in the company’s name.

Hardware Costs

The cost of any machinery or hardware that is required for the business, including any computers, office equipment, software, office furniture etc. can be claimed back. As long as the item is purchased in the company name and the invoices and receipts are kept, the price can be claimed back under its Annual Investment Allowance, which stands at £200,000 of plant and machinery deductions each year.

Travel and Expenses

You cannot claim expenses for travel made to the place of your usual workday, whether that be at a home office, an office space that you rent, or a co-working space. However, if you have to travel outside of this for work purposes, for client meetings, conferences or training, supplier meetings or to interview potential new employees, you can claim for those travel expenses. You can claim small deductions for air travel, ferry, bus, train, coach and taxi fares, for car hire, parking and road trolls. On top of that you are entitled to claim expenses for any overnight stays in hotels that relate to business, and incidental overnight expenses such as laundry, phone calls, Wi-Fi charges etc. (the IOE allowance is £5 per night/or £10 per night if overseas on business).

Professional Literature

One area that you might not be aware of is tax deductible is literature. If you have purchased or subscribed to an industry magazine, journal or business book you can make a claim for the expense. This has to be relevant to your industry or to that of your clients in order to be allowed as an expense.

There are countless other ways in which you can take advantage of the deductible allowances as a business owner. If you are unsure about a certain item or expenditure, speak with your accountant for a much clearer view.


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