During the course of trade, a company will incur a number of business-related expenses. These costs have the effect of reducing trading profit on which corporate tax is calculated.
However, business expenditure can only be claimed against tax if it is incurred ‘wholly and exclusively’ for business purposes.
Some examples of allowable expenditures are;
• Computer software or hardware
• Mileage claims at approved mileage rates
• Pre-packaged or prepared meals from an outlet
• Accountancy and advisory fees
• Accommodation if an overnight stay is required for work purposes.
Nasa Consulting clients receive detailed advice on expenses, which a company may incur, qualifying for tax relief.
Some of these allowable expenses are subject to the 24-month rule.
The 24 month rule determines whether or not a workplace is considered ‘temporary’, and therefore if expenditure relating to it can be classified as business expenses. If the workplace is not ‘temporary’ but considered as a permanent place of work, some of the travel and subsistence costs will not qualify for tax relief.
A workplace would not be considered temporary if it is the same location for over 24 months and more than 40% of working time is spent there.