As a small business owner, it is important to keep track of your expenses and make sure that you are claiming all the costs that you are entitled to. This not only helps in reducing your tax liability, but also ensures that you are running your business efficiently. In this article, we will discuss the various expenses that can be claimed through your business, as explained by Darren Fell, managing director of Crunch Accounting.
The first and most obvious expense that can be claimed through your business is the cost of goods or services that you have purchased for the purpose of running your business. This includes raw materials, inventory, office supplies, and any other items that are necessary for your business operations. These expenses are known as “direct costs” and are fully deductible from your business income.
Another expense that can be claimed through your business is the cost of rent or mortgage for your business premises. This includes not only the space that you use for your business, but also any additional space that you may need for storage or other purposes. It is important to note that this expense can only be claimed if the space is used exclusively for business purposes.
In addition to rent or mortgage, you can also claim utility bills such as electricity, gas, and water, as well as internet and phone bills. These expenses are considered “overhead costs” and are deductible from your business income, as long as they are used for business purposes.
If you use your personal vehicle for business purposes, you can also claim a portion of your vehicle expenses. This includes fuel, maintenance, and insurance costs. However, it is important to keep a log of your business mileage in order to accurately calculate the portion that can be claimed.
As a small business owner, you are also entitled to claim a portion of your home office expenses. This includes rent or mortgage, utilities, and other expenses related to your home office. However, it is important to note that this can only be claimed if your home office is used exclusively for business purposes.
Another expense that can be claimed through your business is travel expenses. This includes airfare, hotel accommodations, meals, and other expenses related to business trips. However, it is important to keep a record of your business purpose for the trip and the expenses incurred.
In addition to these expenses, there are also other costs that can be claimed through your business, such as advertising and marketing expenses, professional fees, and bank charges. It is important to keep detailed records of these expenses in order to accurately claim them on your tax return.
It is also worth mentioning that as a small business owner, you can claim a portion of your personal income tax as a business expense. This is known as “drawings” and is the amount of money that you withdraw from your business for personal use. However, it is important to consult with a tax professional to ensure that you are claiming the correct amount.
In conclusion, it is important for small business owners to keep track of their expenses and claim all the costs that they are entitled to. These expenses not only help in reducing your tax liability, but also ensure that you are running your business efficiently. It is recommended to consult with a tax professional to ensure that you are claiming all the expenses correctly. As Darren Fell says, “By claiming all the expenses that you are entitled to, you can save your business money and invest it back into growing your business.”
