Small Business Tips
Writing off business expenses can feel like a minefield. On the one hand, you want to make sure you deduct everything you can. But then again, you never know when HMRC might decide to audit you.
Here’s a look at what kind of business expenses you can write off.
What’s the difference between revenue and capital expenses?
HMRC allows you to write off two main types of business expenses:
- Capital expenses
- Revenue expenses
Capital expenses are large purchases which you’ll be using in your business for a reasonably long time. UK law doesn’t set out a specific timeframe. However, you’d expect to keep using a capital expense in your business for at least a year.
Capital expenses usually fall into one of three categories:
- Equipment
- Machinery
- Business vehicles
Examples of capital expenses include:
- Laptops, tablets and printers
- Vans and lorries
- Fittings and fixtures, for instance, if you have a shop
By contrast, revenue expenses are expenses which you incur during the day-to-day running of your business. They include:
- Professional fees, such as accounting and legal fees
- Marketing costs
- Stationery, such as printer paper, ink cartridges, envelopes, notebooks and pens
- Books and professional development courses
- Workwear
HMRC’s HS222 helpsheet has a table of the most common revenue expenses which you can write off.
