Top 10 Tax Deductions Small Businesses Often Miss

Top 10 Tax Deductions Small Businesses Often Miss Hero Image

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Running a small business can be challenging, but don’t let unclaimed tax deductions cost you money. Many small business owners overlook valuable deductions that could significantly reduce their tax bills. At Accounting Wise, we’ve compiled a list of the top 10 tax deductions small businesses often miss to help you maximise your savings.

1. Home Office Expenses

If you work from home, you can claim a portion of your household expenses, such as rent, mortgage interest, utilities, and internet, based on the percentage of your home used exclusively for business purposes.

Tip: Keep detailed records of your workspace size and expenses.

2. Mileage and Vehicle Expenses

Do you use your car for business purposes? You can deduct mileage, fuel, insurance, and maintenance costs. Just ensure you maintain accurate records of business-related travel.

Tip: Use an app to track mileage for easy record-keeping.

3. Professional Services

Fees paid to accountants, legal advisors, or consultants are fully deductible as long as they are related to your business.

Tip: Retain all invoices and agreements as proof of professional services rendered.

4. Marketing and Advertising Costs

From social media ads to printing business cards, marketing expenses are often deductible. This includes website hosting, email marketing software, and promotional events.

Tip: Categorise your marketing spend for easier tracking and reporting.

5. Training and Education

Investing in your skills or your team’s development can be deducted as long as the training relates directly to your business. This includes courses, certifications, and even trade show attendance.

Tip: Save receipts and course syllabuses for documentation.

Streamlined Self-Assessment Tax Returns for Peace of Mind

 Self Assessment Tax Returns

Streamlined Self-Assessment Tax Returns for Peace of Mind

 Self Assessment Tax Returns

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6. Bad Debts

If a client fails to pay, you may be able to write off the unpaid amount as a bad debt. This applies primarily to income already reported.

Tip: Keep a record of all attempts to recover the debt.

7. Business Equipment and Tools

Purchases like laptops, phones, or specialised tools can often be deducted under the Annual Investment Allowance (AIA), which allows you to claim the full cost of qualifying assets.

Tip: Check if your purchase qualifies for AIA or needs to be depreciated over time.

8. Subscriptions and Memberships

Business-related subscriptions, such as industry journals, software, or trade association memberships, are deductible.

Tip: Ensure subscriptions are used exclusively for business purposes.

9. Employee Benefits

Costs for employee benefits, such as pensions, health insurance, or staff entertainment, are often tax-deductible.

Tip: Familiarise yourself with HMRC’s rules to claim eligible benefits.

10. Charitable Contributions

Donations to registered charities can be deducted if they are made on behalf of your business. This includes sponsorships or contributions in kind.

Tip: Ensure the charity is recognised by HMRC and retain donation receipts.

How to Ensure You Don’t Miss Deductions

  1. Keep Organised Records: Accurate, detailed records are essential for claiming deductions.
  2. Use Accounting Software: Tools like QuickBooks or Xero help track expenses effortlessly.
  3. Consult a Professional: An accountant can help identify deductions you may not be aware of.

Final Thoughts

Maximising tax deductions is one of the easiest ways to improve your small business’s bottom line. By staying informed and organised, you can claim what you’re entitled to and keep more of your hard-earned money.

At Accounting Wise, we specialise in helping small businesses optimise their taxes.

Choose Accounting Wise today to ensure you’re not leaving money on the table.

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