The rules for allowable business expenses are generally similar for limited and unlimited companies, with some subtle exceptions. Where there are differences  – these are identified in the guide below.
Medical Check Ups For the employer:

  • Annual health screenings and medical check-ups provided by an employer are fully allowed as a business expense, even if the benefit is selectively provided to certain employees only.

For the employee

  • Annual free check ups are not a benefit in kind.
Medical Insurance For the employer

  • The costs of providing a healthcare policy for staff and directors are fully allowed as a business expense

For the employee

  • Medical Insurance is a benefit in kind reportable on a P11D

Why does medical insurance that is paid by the company affect your P11D?

Mileage Claim

  • If you use your personal car for business miles, you can claim business mileage
  • You can claim 45p per mile for the first 10,000 miles and 25p thereafter.

Record Keeping

  • Remember to keep a mileage log showing all of your business miles. HMRC requires detailed records to evidence your business mileage claim.

2 year rule:

  • If you travel to the same clients address, more than circa 60% of your time, then after 2 years HMRC deem this as commuting and is a disallowed expense.

Top Tips Use Tripcatcher for recording your mileage –  Introduction to Tripcatcher

HMRC rules for mobile phones are as follows: Where the Employer provides the phone:

  • The provision of a single mobile phone to an employee for personal use is not a taxable benefit, provided it is supplied under a contract in the employer’s name .

Where the Employee provides the phone:

  • If the contract is in the name of the employee , and the employer meets the costs of the phone, any private use will be taxable.
  • As the employer is settling a debt of the employee, the payments made should be put through the payroll, which means Class 1 NIC applies.
  • When a phone is taxable, the benefit is calculated by adding together all the bills received in the tax year, and then deducting any costs for business calls. Basic contract costs are not business related for this purpose so these are a deemed a benefit in kind.
Motorbikes and bicycles As with a car you can also claim mileage for a motor bike, which is 24p per mile and 20p per mile for a bicycle. Don’t forget to log your miles, even cycling to the post office for business is allowable.
We hope you find this series on expenses helpful. Please take a moment to check out our other articles.

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