There is often some misunderstanding about which items of business expenditure are deductible against profits for tax purposes, and which are not. The following list covers the items most commonly requiring explanation. The list is written in general terms, so specific advice should always be taken   Item Deductible against Profits Not Deductible Normal business expenses generally Expenditure incurred wholly and exclusively in the course of business Personal expenditure and all entertaining except staff Capital items (i.e. items expected to be used for more than 1 year) An annual capital allowance is available on most items of equipment Freeholds and long leaseholds of most non-industrial premises Accountancy fees Normal business related fees Costs of unsuccessfully defending a Revenue & Customs investigation Bad debts Specific bad debts from unrelated parties General provisions and debts written off voluntarily Bank charges and interest Charges on business accounts and business related loans Interest for personal overdrafts and loans Computer software If bought separately from hardware Otherwise, capital allowances available Gifts to customers Gifts costing up to £50 and bearing the business name Any item of food or drink Home expenses Reasonable proportion of home running expenses, depending on the extent of use of home for business Domestic expenses not related to the business Insurance Business related policies Life assurance, self-employed NI, health and sickness insurance Legal fees Most business related advice Partnership agreements, company formation, property acquisition and renewing long leases Motor expenses Business proportion based on mileage Private element Other interest Interest on business loans Interest on income tax paid late and interest paid to proprietors Personal expenditure Modest subsistence expenses in certain cases when working away Lunches, private expenses and bills, gifts, clothing (unless a uniform) Subscriptions Professional subscriptions, relevant magazines and journals Clubs, charities and items not associated with the business Telephone bills Business proportion based on calls Private element and home line rental Travel expenses Business travel Travel between home and normal place of business Wages and salaries Staff (including family where duties genuinely carried out) Proprietor's own drawings and gratuitous wages to family       Designed & Built by: Clubasia doIT TM       Home   |   About Us   |   Our Services   |   Tax Tables   |   Tax Facts   |   Useful Links   |   Contact Us   © Copyright PJT and Co 2005. All rights reserved. This information has been produced for general interest. It is therefore essential to take advice on specific issues. We are unable to take responsibility for any outcome resulting from acting upon, or refraining to act upon, this information.