Which expenses are allowable against my business income?

You can claim expenses which are “wholly and exclusively” incurred for the business. In practice this means most business expenses subject to certain specific exclusions such as:

  • entertainment and
  • depreciation (you can instead claim capital allowances in respect of capital expenditure for business purposes)

Some expenditure has a dual purpose – it includes elements of both business and private use. For example a mobile telephone. Such expenditure should be apportioned on some reasonable basis between business and private use. (For mobile telephones an itemised bill could be used. If the pattern of usage is consistent from one month to another, it may be possible to derive a percentage of business use which can be used throughout the year).

Other examples of dual purpose expenditure might be motor car and use of home as office.