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In fact, the eligibility of expense claims is often a conversation we have with our exceptional clients on a regular basis & therefore it felt right to spend some time to examine some of the common expenses your business can claim for. So, with the echoes of HMRCs definition of expenses very firmly in our mind let’s begin…
Now that we have spent some time outlining some of the claimable expenses for your agency, how about we take some time to explore some further expenses that can be classed as tax-deductible (yippee!) but come with certain rules & stipulations that you have to respect (seems fair, right?).
Mobile phone are great. In fact, I think that’s a direct quote from Mr. Steve Jobs himself. But they are; recruitment nowadays is a 24/7 business & therefore their importance in a business setting is acknowledged by HMRC. This means that they are viewed as an allowable business expense.
What is important to note is that you can actually put through 100% of a mobile phone costs through your company, regardless of how much personal use there is, providing the contract is between your limited company and the network provider.
So, rather than needing to take out a whole new contract, if you contact your personal mobile phone provider and get them to switch your existing contract into your business’ name – the full cost can then go through the business. So be sure to give your provider a call & get that switch sorted!
When procuring new business, meeting with suppliers or having an off-site meeting with your team, the cost incurred can often be viewed as a claimable expense that you are able to put through your new recruitment agency.
& While there are not any limits as to how much or what you can claim for, business entertainment will not reduce the taxable profit of your company as with other expenses. You are also not able to reclaim any VAT costs incurred. For a more specific breakdown on this it would be best to talk directly with your accountant(s) to ensure you are doing what is best for your company both “now” & going forward.
Looking to build your recruitment empire initially from your back bedroom? Great! It has always been our advice to ensure that your costs remain low & you’re able to keep as much money in the business to support you with the longer term ambitions of your agency.
HMRC have currently set an allowance (as of November 2020), which can be claimed through your business from the director, to cover the uplift in utility costs working from home will incur. The current allowance is set at £312 per year (£26 per month).
Unlike with most other business expenses, no receipts or invoices need to be kept as proof of claiming for this so be sure to ensure that your accountants are reflecting this in your monthly management accounts (MMAs) on a regular basis.
Contrary to popular belief, HMRC enjoy a party here or there. They enjoy them so much that they’ve even put in place a Staff Part Allowance for your recruitment business – how nice is that?
Colloquially this is often referred to as the “Christmas Party” allowance.
This means you can claim £150 per staff member and £150 for a plus one as well. This amount can cover; meals, entertainment (such as tickets for an event etc.), travel and accommodation – as long as the total value including VAT doesn’t exceed £150 per head.
It is also possible to split the cost over multiple events, again as long as the total cost for the year doesn’t exceed £150 per head.
While, of course, this is not an exhaustive list as we appreciate there is only so much accounting chatter one can take in one go (!), we hope this can give you a good idea of the types of claimable expenses for your own recruitment business.
Our advice? Talk with your accounts team to ensure that the echos of HMRC are in everything that you do. Want to know if you may be able to claim something as an expense or not? Ask yourself, is it “wholly, exclusively & necessarily” for the business or not?…
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