What counts as a business expense
A cost counts only if it was for the business. Sort business costs from private ones and add up what belongs in the record.
This path is practice in how the records and the sums work. It is not tax advice. Any rate or allowance in a question is an example for that question, so check GOV.UK for the current figures.
Task 1The test for a business expense4 questions
A business expense is a cost you paid only so that the business can earn its income. The usual wording is wholly and exclusively for the business.
- Things used up doing the work, such as leads, treats and poo bags
- Insurance for the business
- Advertising and a website
- The fee of a bookkeeper or an accountant
Your own food, rent and holidays are private costs. Money you take out for yourself is drawings, not an expense.
This room teaches how to sort and record costs. Whether a doubtful cost is allowed for tax is a question for GOV.UK or an accountant, so keep the receipt and ask.
Task 2Adding up what belongs4 questions