| 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 |
|
| 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 |
|
| Telephone bills
| Business proportion based on calls |
Private element and home line rental |
|
| Motor expenses |
Business proportion based on mileage |
Private element |
|
| Travel expenses |
Business travel |
Travel between home and normal place of business |
|
| Subscriptions |
Professional subscriptions, relevant magazines and journals |
Clubs, charities and items not associated with the business |
|
| Wages and salaries |
Staff (including family where duties genuinely carried out) |
Proprietor's own drawings and gratuitous wages to family |
|
| Bank charges and interest |
Charges on business accounts and business related loans |
Interest for personal overdrafts and loans |
|
| Other interest |
Interest on business loans |
Interest on income tax paid late and interest paid to proprietors |
|
| Insurance |
Business related policies |
Life assurance, self-employed NI, health and sickness insurance |
|
| Bad debts |
Specific bad debts from unrelated parties |
General provisions and debts written off voluntarily |
|
| Accountancy fees |
Normal business related fees |
Costs of unsuccessfully defending a Revenue & Customs investigation |
|
| Legal fees |
Most business related advice |
Partnership agreements, company formation, property acquisition
and renewing long leases |
|
| Personal expenditure |
Modest subsistence expenses in certain cases when working away |
Lunches, private expenses and bills, gifts, clothing (unless a uniform) |
|
