Self-employed individuals are entitled to claim back a broad range of business expenses against their tax bill every year. But are you fully informed on which expenses you can claim for? If your answer to that question is “no”, you could be missing out on a significant amount of money each year.
Sure enough, a recent poll of more than 1,200 small business owners revealed that 81% of respondents didn’t understand what qualified as a legitimate expense.
The expenses least likely to be claimed against small business’ tax bills
There are various expenses that small businesses often fail to claim for, despite them normally counting as allowable business expenses. These range from work clothing and food and drink to vehicle expenses, hire purchase and premises costs.
Why are small business owners not claiming expenses?
The above-mentioned research revealed numerous reasons for small businesses not making a claim. These included, as cited by 43% of those questioned, losing receipts and invoices, while 41% said they weren’t bothered or didn’t have the time to claim.
36% of those polled, meanwhile, were unsure whether their claim would comply with the rules set out by HM Revenue & Customs (HMRC), and 8% were worried about being hit with HMRC penalties.
If the above have been worries for you, it’s worth bearing in mind our own specialist bookkeeping in Plymouth and Wellington here at Britebooks. Our experts can help ensure your claim is legitimate and evidenced, thereby allowing you to claim expenses without the need to sacrifice time you’d rather focus on your core business.
How much money is being lost by businesses in unclaimed expenses?
The recently released data indicated that 65% of those surveyed had failed to file a business expense at some point in the past.
Yearly losses as a result of such unclaimed expenses have been said to range from £100 to over £10,000. 35% of small businesses estimated an annual loss of less than £100, and another 35% estimated an annual loss of £100 to £499.
13% of small businesses estimated they lost an average of £500 to £999 per year, 8% said £1,000 to £2,499, 4% £2,500 to £4,999, and 3% said they lost £5,000 to £10,000 per year. 2% estimated their annual loss due to unclaimed expenses at over £10,000.
Although this means that most small businesses lose less than £500 per year as a result of unclaimed expenses, this could build up to a significant amount over the years. In fact, it is estimated that UK small businesses lose a total of £5.6 billion every year because they fail to claim expenses.
Don’t trust any other professionals with your bookkeeping in Plymouth or Wellington
Our bookkeeping service can not only greatly help to increase the accuracy and quality of your finances, but can also make everyday bookkeeping tasks practically effortless. This, in turn, could help you to claim your expenses with confidence.
Reach out to the Britebooks team in Devon or Somerset today for further information.
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