Keeping personal and business expenses separate will simplify things in the long run. It will be easier to manage taxes and you will have a better idea of your personal and business expenses.

A business expense is directly linked to your business earning an income. For example if you buy something for business purposes, it’s a deductible business expense.

Business expenses can include:

  • vehicle expenses
  • transport costs
  • travel for business purposes
  • rent and utilities paid on business premises
  • wages
  • interest on borrowing money for the business
  • stationery
  • accountant’s fees
  • membership of professional associations
  • home office expenses
  • work-related mobile phones
  • phone bills

For some expenses e.g. client meals and staff functions, you can only claim half. Inland Revenue has a great guide on entertainment expenses on their website. The guide also clarifies different expenses for the home office and how much you can claim.

If you have a business account and credit card, you know that every transaction is related to your business and should be deductible. That will save you a lot of valuable time going over statements and remembering what each expense was for exactly.

What if you have an expense that’s partly for your business and partly for your private use?  You can claim the proportion that relates to your business.

Example: If you pay for a broadband connection for your home for private purposes and use half for business, you can claim 50% of the cost as a business expense.

We are here to work with you – if you are unsure about how much you should claim for certain expenses, get in touch with our friendly team and we can help you sort through things!

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