What Can a Limited Company Claim as Business Expenses?

Claiming the right business expenses reduces your company’s taxable profit and therefore its Corporation Tax. The golden rule is that an expense must be incurred wholly and exclusively for the purposes of the business.

Commonly allowable costs

• Staff salaries, employer’s National Insurance and pension contributions.
• Office costs, rent, utilities and business insurance.
• Equipment, software and tools used for the business.
• Business travel and accommodation (not ordinary commuting).
• Professional fees, including accountancy.
• Marketing, advertising and website costs.
• Allowable use-of-home costs for directors working from home.

Areas that need care

Some costs are only partly allowable or have specific rules:

• Entertaining clients is generally not deductible for tax.
• Cars are treated differently from other equipment, with capital allowances and benefit-in-kind implications.
• Mixed personal and business use must be apportioned fairly.

Capital vs revenue

Day-to-day running costs are usually deducted in full in the year. Larger assets such as equipment are treated as capital and relieved through capital allowances, which may include the Annual Investment Allowance. Getting this split right matters.

Keep the records

Whatever you claim, keep evidence, invoices, receipts and a note of the business purpose. Good digital records make this painless and protect you if HMRC ever asks. Our Corporation Tax and bookkeeping services make sure claims are both correct and well supported.

Figures and rules are correct to the best of our knowledge as of October 2026 and relate to the 2026/27 tax year unless stated. Tax rules change and depend on your circumstances, always check current guidance on GOV.UK or speak to us before acting.