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  • What are HMRC Advisory Fuel Rates?

    Advisory Fuels Rates (AFRs) are the rates set by government for reimbursing, or being reimbursed for, fuel costs incurred by drivers using company cars. The rates can only be used for fuel costs associated with company cars. You can use them to either repay employees for fuel they have used when using a company car for business purposes, or to calculate what an employee owes you for fuel paid for by the business and used for private travel in a company car.

    Rates are calculated based on fuel prices and adjusted by mile per gallon figures. You can use alternative rates without incurring a tax liability if you can demonstrate that the rate is valid – for example, the real cost of business travel is higher or lower than the advisory fuel rates.

    HMRC review advisory fuel rates quarterly, details of current rates can be found on the government website by clicking here. Following a rate change, previous rates can be used for up to 1 month from the date the new rates apply.

    Do you still have questions? Get in touch with our accounts service team to find out more about how they can help.

  • What business premises costs can I claim as tax deductible expenses?

    You can claim expenses for:

    • rent for business premises
    • business and water rates
    • utility bills
    • property insurance
    • security
    • repairs and maintenance of business premises and equipment
    • using your home as an office (only the business part)

    You can’t claim expenses or allowances for buying business property or premises.

    You can claim capital allowances for some integral parts of a building, such as water heating systems.

    Do you still have questions? Get in touch with our accounts services team to find out more about how they can help you.

  • What business supplies and services can I claim as tax deductible expenses?

    You can claim expenses on business supplies and services for:

    • phone, mobile, fax and internet bills
    • postage
    • stationery
    • printing
    • printer ink and cartridges
    • computer software your business uses for less than 2 years
    • computer software if your business makes regular payments to renew the licence (even if you use it for more than 2 years)

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • How do I calculate business mileage allowance payments?

    Business Mileage Allowance Payments are what you pay your employee for using their own vehicle for business journeys. You don’t have to report these payments to HMRC.

    Mileage claims should be supported by an expense claim noting the reason for the travel and the number of business miles. Travel from home to a permanent place of work is not considered to be business mileage. A person can have more than one permanent place of work.

    There are additional rules regarding payments made through intermediaries.

    To calculate the ‘approved amount’, multiply your employee’s business travel miles by the rate per mile for their vehicle.

    Rates per business mile

    Type of vehicle First 10,000 miles Above 10,000 miles
    Cars and vans 45p 25p
    Motorcycles 24p 24p
    Bikes 20p 20p

    If your employee carries another employee in their own car or van on a business journey, you can pay them passenger payments of up to 5p per mile tax-free.

    Ask employees to provide periodic VAT fuel receipts to cover the mileage they are claiming for. This will enable you to reclaim 2.5p of VAT on each mile expensed.

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • What travel and vehicle costs can I claim for as tax deductible expenses?

    Vehicles owned by the business are capital items and tax relief is claimed as a capital allowance. Businesses can reclaim the VAT payable on the purchase of a van but not on a car.

    You can claim the following costs for vehicles that are owned by the business:

    • vehicle insurance
    • repairs and servicing
    • fuel for business use
    • vehicle licence fees
    • breakdown cover

    If you own the vehicle personally, you can’t claim for the above as a business expense.

    You can claim the following for business and non-business vehicles when used for business purposes:

    • parking
    • business mileage – claims should be supported by an expense claim noting the reason for the travel and the number of business miles.

    You can claim travel costs for:

    • hire charges
    • train, bus, air and taxi fares
    • overnight accommodation when travelling on business
    • food and drink on work journeys outside your normal commute. The more the journey resembles your normal pattern of work, the less likely you are to be able to claim the expenses without potentially incurring a personal benefit-in-kind
    • dinner and breakfast when staying overnight – reasonable costs and alcohol with a meal only.

    You cannot claim

    • non-business mileage
    • non-business travel costs or travel costs not exclusively for work e.g. top up of travel card available for personal use.
    • speeding fines, parking tickets, non-payment of rail fares and other penalties
    • travel between home and a permanent place of work. Anywhere that you work at least once a week, on a long-term basis, is classed as a permanent place of work. You can have more than one permanent workplace
    • parking fines, speeding tickets, non-payment of rail fares and other penalties.

    You can extend a business trip to do some shopping or sightseeing and still claim for the for the trip. As long as the primary purpose of the trip is business, you can still claim all the business-related costs. Make sure you keep proper records, notes and board minutes or conference materials to document the main reason for the trip and satisfy HMRC.

    However, if you go on holiday and decide to do some business whilst there, you can’t claim for the cost of the business activity.

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • What clothing costs can I claim for as tax deductible expenses?

    You can claim expenses on clothing costs for:

    • uniforms
    • protective clothing needed for your work
    • costumes for actors or entertainers

    You can’t claim for everyday clothing (even if you wear it for work).

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • What subscriptions can I claim as expenses?

    You can claim expenses on subscriptions for:

    • trade or professional journals
    • trade body or professional organisation membership if it’s related to your business.

    You can’t claim for:

    • payments to political parties
    • gym/sports club membership fees (although there may be tax benefits to both employers and employees through offering these as a taxable benefit)
    • donations to charity

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • What marketing and entertainment expenses can I claim as tax deductible expenses?

    You can claim the following as tax deductible marketing and entertainment expenses:

    • advertising in newspapers or directories [online or offline?]
    • bulk mail advertising (mailshots)
    • cost of providing free samples
    • website costs
    • staff entertaining – for example, a staff party, up to £150 per year. Directors are classed as employees for this purpose.
    • providing catering during a training workshop, if you are under a contractual obligation to do so.

    You can’t claim for:

    • entertaining clients, suppliers, customers or professional contacts, unless it’s on a quid pro quo basis – such as buying someone lunch in exchange for them giving you the benefit of their knowledge on a specific topic for free.
    • event hospitality.

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • What financial charges and costs can I claim as tax deductible expenses?

    You can claim business costs for:

    • bank, overdraft and credit card charges
    • interest on bank and business loans
    • hire purchase interest
    • leasing payments
    • bad debts (sales invoices which will not be paid). You can only write off these debts if you’re sure they won’t be recovered from your customer in the future, they need to be over 6 months old to be able to reclaim any VAT on the sales invoice.

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • What professional fees can I claim as tax deductible expenses?

    You can claim costs on professional fees for:

    • hiring of accountants, solicitors, surveyors and architects for business reasons
    • professional indemnity insurance premiums
    • any insurance policy for your business, e.g. public liability insurance.

    You can’t claim for:

    • legal costs of buying property and machinery – these are claimed as capital allowances
    • fines for breaking the law.

    Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

  • What is Social Investment Tax Relief?

    Social Investment Tax Relief (SITR) is a government relief for social investment with the aim of encouraging individuals to support charities and social enterprises, to help them to access new sources of repayable finance.

    Individuals who make an eligible investment can deduct 30% of the cost of the investment from their income tax liability for either;

    • the tax year in which the investment is made; or
    • the previous tax year.

    The investment must be held for a minimum period of three years for the relief to be retained.

    Do you still have questions? Get in touch with our tax team to find out more about how they can help you.

  • What expenditure qualifies for R&D tax relief?

    The range of costs associated with a qualifying R&D project that you can claim for is deliberately broad and includes expenditure such as:

    • staff salaries, employer’s National Insurance Contributions, and pension contributions for staff working directly on the project as well as for administrative staff supporting it. You can also claim certain expenses such as project-related travel.
    • subcontractors and freelancers engaged directly or indirectly in the R&D activity.
    • materials and consumables including heat, light and power that are used up or transformed by the R&D process.
    • prototype costs.
    • some types of software.

    Your R&D doesn’t have to be successful to qualify and you can, in some circumstances, include work undertaken for a client as well as your own projects.

    Do you still have questions? Get in touch with our tax team to find out how they can help you.

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