UK Tax allowances to claim: don’t leave money on the table!

The end of the tax year is approaching and you know what that means… It’s time to make sure you’re claiming all those tax allowances you’re entitled to!

Whether you’re running a limited company or self-employed, HMRC has some good allowances that can save you money. But they don’t exactly shout about them from the rooftops, do they? But we’re here to change that. Here’s our rundown of the tax allowances you might be missing out on – consider it our little gift to your bottom line

Trivial benefits allowance
Ever felt guilty about treating yourself? Well, stop that right now. As a company director, you can give yourself (and your employees) gifts worth up to £50 each time, without paying tax or National Insurance on them. And you can do this multiple times a year for up to £300 total for directors (£50 for employees). The catch? (There’s always a catch with HMRC, isn’t there?)

• It can’t be cash or a cash voucher
• It can’t be a reward for work or performance
• It can’t be in your employment contract
• It can’t be something you’re entitled to
  

The Countingup app provides advice to small business owners on how to legally save money on tax with hints and tips, like trivial benefits and work from home allowance. Learn more about Countingup here.

Annual staff party allowance
Office parties aren’t just good for team morale – they’re good for your tax bill too! You can spend up to £150 per person (including plus-ones) each year on social events for your team, tax-free. This includes food, drinks, transport, and accommodation.

The rules: It has to be an annual event like a Christmas party, it must be open to all employees and must stay under that £150 per head limit (even by 1p over and the whole thing becomes taxable!) One-person company? Yes, you can still claim this for yourself and a guest.

Home working allowance
Working from home? You can claim £6 a week as a flat rate for the extra costs of working from home, without needing to keep any receipts or do any calculations. Want to claim more? You can, but you’ll need to show evidence of your actual costs.

Mobile phone and internet allowances
Your company can provide you with one mobile phone and pay the entire bill, tax-free. For home internet, if you can show it’s needed for business, your company can pay for it. Just be careful – if it’s a split personal/business usage, only the business part is tax-deductible.

Travel and mileage
When you’re travelling for business (this doesn’t include from home to your regular workplace), you can claim:

• 45p per mile for the first 10,000 miles by car
• 25p per mile after that
• 24p per mile for motorcycles
• 20p per mile for bicycles

You can also claim for public transport, accommodation, and food and drink when you’re away for business.

Trading allowance
If your side hustle is still small, listen up. The first £1,000 of income from self-employment is tax-free under the Trading Allowance. If you’re making less than that, you don’t even need to report it to HMRC.

Making more? You can either deduct this £1,000 as a flat rate instead of calculating your actual expenses or claim your actual business expenses if they’re higher.

Home office deduction
Work from home as a self-employed person? You can claim a portion of your home running costs. You can either:

• Use simplified expenses (flat rates based on the hours you work from home)
• Calculate the actual proportion of your bills that relate to your workspace
• Simplified is easier, but calculating might save you more. Your choice!

Training and development
Investing in yourself is always a good idea – and sometimes it’s tax-deductible. Training costs are allowable if they update existing knowledge or skills related to your business. But if you’re learning something totally new? HMRC might consider that “capital expenditure” and not give you the tax break.

Annual investment allowance
Planning to buy equipment for your business? You can claim 100% of qualifying items against your profits in the year you buy them, up to the Annual Investment Allowance limit. This covers most business equipment, from computers and tools to office furniture and certain fixtures.

Employment allowance
If you have employees (or you’re a director taking a salary through PAYE), you might be eligible for Employment Allowance. This can reduce your employer’s National Insurance bill by up to £5,000 per year.

Research and development tax credits
Developing new products, processes or services? You could claim R&D tax relief which is much more widely available than most small businesses realise. Even if your R&D project failed, you could still claim.

Look, we get it. Tax stuff isn’t exactly exciting. But leaving these allowances unclaimed is basically like leaving money on the table, and who wants to do that? The tax year end is almost here, so now’s the perfect time to check if you’re making the most of these allowances.

If you’re looking for a new business current that helps you get the most out of your money, we might be the one for you. Find out more on what Countingup has to offer small business owners like you here.