What Expenses Can a Limited Company Claim in the UK? 2026 Guide

Running a limited company comes with plenty of costs. The good news? Many of them could help reduce your Corporation Tax bill.

From accountant fees and business mileage to marketing, equipment and even the annual Christmas party, there are a wide range of expenses a limited company may be able to claim.

The important part is knowing what’s allowable, what’s not and what records you need to keep. In this updated guide, we explain the main limited company expenses you can claim in 2026 and some of the HMRC rules to watch out for.

How Does Tax Relief Work for Limited Companies?

Limited companies pay Corporation Tax on their taxable profits. Claiming allowable business expenses reduces those profits, which can reduce the amount of Corporation Tax your company has to pay.

As a general rule, revenue expenses need to be incurred wholly and exclusively for business purposes and must not be specifically disallowed.

If you pay for a business expense personally, you can usually claim the money back from your company where the expense qualifies. The same applies to employees who incur qualifying costs while carrying out their duties.

Not every expense is straightforward, so if you’re unsure whether something can be claimed, it’s worth checking before including it in your company accounts.

What Records Should You Keep for Business Expenses?

HMRC generally requires limited companies to keep accounting records and supporting documents for six years from the end of the financial year they relate to. You may need to keep them for longer in certain circumstances, such as during an HMRC compliance check.

Keep invoices, receipts and other evidence of your company’s expenditure, along with clear records showing what each expense was for. Records can be kept digitally, which makes accounting software and receipt-capture apps particularly useful.

If you don’t currently use online accounting software, dns accountants recommends Nomisma. Its mobile app lets you photograph and store receipts as you go, while the expense module can help you record common costs such as mileage and working-from-home expenses.

What Expenses Can a Limited Company Claim?

Here’s a quick overview before we get into the detail.

What Expenses Can You Claim as a Limited Company?

Accommodation Expenses When Travelling for Business

If you need to stay away from home while travelling to a temporary workplace or another location for business, reasonable accommodation costs can usually be claimed.

This might include a hotel, B&B or other temporary accommodation.

There isn’t usually a fixed UK accommodation allowance. Instead, the cost should be reasonable and genuinely connected to qualifying business travel.

Travelling overseas? You may be able to claim your actual qualifying costs or use HMRC’s overseas scale rates for the country and city you’re visiting.

Special rules also apply where an employer provides residential accommodation to an employee.

Accounting Fee Expenses

Your limited company can generally claim the cost of accounting services provided for the business.

This could include:

• Annual accounts
• Corporation Tax returns
• Bookkeeping
• Payroll
• Company-related tax advice

Personal accounting costs need to be treated separately. For example, the cost of preparing a director’s personal Self Assessment return isn’t automatically a company expense simply because they’re a director.

Where an employer pays a personal liability on behalf of a director or employee, Benefit in Kind and reporting rules may need to be considered.

Advertising and Marketing Expenses

Costs incurred promoting your business can generally be claimed.

This could include advertising, PR, networking, paid social media, website promotion, brochures and other genuine marketing activity.

Be careful when food, drink or hospitality is involved. Client entertaining is generally not deductible for Corporation Tax simply because it helps promote the business.

Bank and Overdraft Charges

Business bank charges, overdraft charges and qualifying interest or finance costs may be deductible where they relate to the company.

This can include charges associated with business bank accounts and business borrowing.

However, the tax treatment of borrowing can depend on how the money is used, particularly with more complex finance arrangements.

Business Mileage Expenses

If you use your own vehicle for qualifying business journeys, your company can reimburse you using HMRC’s Approved Mileage Allowance Payments (AMAPs).

For 2026/27:

The car and van rate increased from 45p to 55p for the first 10,000 business miles from April 2026.

These mileage rates are designed to cover the costs associated with using your own vehicle, including fuel, insurance, servicing, repairs and depreciation.

Parking charges, congestion charges and tolls associated with qualifying business journeys can generally be considered separately.

VAT-registered businesses may also be able to reclaim VAT on the fuel element of qualifying mileage payments, subject to the appropriate rules and evidence.

Books and Magazines Bought for Business Purposes

Books, journals, trade magazines and other publications can potentially qualify where they’re bought for genuine business purposes.

For example, they may be used for professional research, reference or training.

A general daily newspaper or magazine bought mainly for personal reading won’t normally become allowable simply because it occasionally contains something relevant to your work.

Business Insurance

Insurance policies taken out for business purposes can generally be claimed.

• Professional Depending on your company, these could include:
• Professional indemnity insurance
• Public liability insurance
• Employers’ liability insurance
• Business contents insurance
• Specialist industry cover

The appropriate insurance will depend on the nature, size and activities of your business.

Cars, Vans and Travel Expenses

Business travel can cover much more than mileage.

Depending on how a vehicle is owned and used, allowable business costs may include:

• Vehicle insurance
• Fuel
• Parking
• Repairs and servicing
• Vehicle licence fees
• Hire charges
• Breakdown cover

Other qualifying business travel expenses could include:

• Hotel rooms
• Bus and train fares
• Flights
• Taxi fares
• Meals during qualifying overnight business trips

However, the rules differ depending on whether you’re using your own vehicle or a company vehicle, so you can’t necessarily claim all of these costs as well as the approved mileage rate.

You also can’t normally claim:

• Ordinary commuting between your home and permanent workplace
• Personal journeys
• Non-business driving costs
• Fines and penalties

Capital Allowances on Assets and Equipment

If your company buys assets to use in the business, tax relief may be available through capital allowances rather than treating the entire purchase as an ordinary revenue expense.

This could include qualifying:

• Machinery
• Computers
• Office equipment
• Furniture
• Business vehicles
• Other plant and equipment

Different capital allowances apply depending on the asset and circumstances. These can include the Annual Investment Allowance and, for qualifying companies and expenditure, full expensing.

Certain expenditure on non-residential buildings and structures may also qualify for Structures and Buildings Allowance.

Charitable Donations Made by Your Company

Qualifying charitable donations can reduce the profits on which your company pays Corporation Tax.

Companies can potentially receive relief for donations including:

• Money
• Equipment or trading stock
• Land or property
• Shares in another company
• Employees working on secondment

Sponsorship is treated differently from a straightforward charitable donation and may instead qualify as a business expense where it is wholly and exclusively for the purposes of the trade.

Childcare Costs

The Childcare Voucher Scheme closed to new applicants in October 2018. However, employees who joined an eligible scheme before it closed may still be able to receive vouchers if they continue to meet the conditions.

For many families, Tax-Free Childcare is now the main government-supported childcare scheme.

Employers can also provide qualifying workplace nurseries, subject to specific conditions.

Christmas Parties and Staff Events

Your annual Christmas party, summer party or similar event can potentially qualify for tax-free treatment.

The exemption applies where certain conditions are met. Generally:

• It must be an annual event.
• It must be available to employees generally.
• The total cost of the qualifying event or events must not exceed £150 per head, including VAT.

The cost includes more than just the venue. Food, drink, entertainment, accommodation and transport provided as part of the event may need to be included when calculating the cost per head.

Importantly, £150 is an exemption rather than an allowance. If a single event costs £160 per head, you can’t simply exempt £150 and tax the remaining £10.

Clothing Expenses

Everyday clothes aren’t normally allowable simply because you wear them for work.

However, the company may be able to pay for qualifying:

• Uniforms
• Protective clothing
• Safety equipment
• Specialist workwear

The cost of hiring and laundering qualifying uniforms or protective clothing can also potentially be covered.

Company Incorporation Charges and Pre-Trading Expenses

Some expenses incurred before your business begins trading can potentially qualify for tax relief.

Qualifying revenue expenses incurred within seven years before trading begins can generally be treated as though they were incurred on the first day of trading.

Examples could include qualifying:

• Professional fees
• Phone costs
• Advertising
• Office costs
• Software
• Other expenses incurred while preparing to trade

Costs associated with creating the company itself and capital expenditure can receive different tax treatment.

Keep records of all pre-trading expenditure so your accountant can determine what qualifies.

Entertainment and Hospitality Expenses

Business entertainment is usually not deductible for Corporation Tax purposes.

That includes many costs associated with entertaining clients, suppliers or other business contacts.

There are limited exceptions and different rules for areas such as genuine promotional events, employee entertainment and certain overseas situations.

If you’re unsure whether an event counts as advertising, staff entertainment or business entertaining, check before claiming it.

Equipment for Your Limited Company

Computers, laptops, printers, software, hardware, office furniture and other equipment needed to run the business may qualify for tax relief.

The way relief is given depends on the nature of the purchase. Some costs may be ordinary revenue expenses, while larger or longer-term assets may receive relief through capital allowances.

Where equipment is also available for private use by a director or employee, Benefit in Kind rules may need to be considered.

Eye Tests and Glasses

If directors or employees regularly use display screen equipment, the company can pay for qualifying eye tests without creating a taxable benefit.

Glasses or contact lenses can also potentially qualify where they’re specifically required for display screen work.

If glasses are needed for general everyday use as well, the exemption may not apply in the same way.

Food and Subsistence When Travelling for Business

Food and drink can be claimed in certain circumstances when you’re travelling for a qualifying business purpose.

The key point is that the travel itself must qualify. You can’t claim your normal lunch simply because you’re working away from your desk.

Qualifying costs can potentially include:

• Food and drink
• Public transport
• Parking
• Hotel accommodation
• Necessary business phone calls
• Certain printing costs
• Congestion charges and tolls

You can reimburse actual qualifying costs or, where the conditions are met, use HMRC’s benchmark scale rates.

An additional £10 late-evening supplement can apply in certain circumstances.

For overseas business travel, HMRC also publishes country and city-specific scale rates covering qualifying accommodation and subsistence.

Gifts and Trivial Benefits Provided to Employees

Small employee benefits can sometimes be provided without creating an Income Tax or National Insurance charge.

For something to qualify as a trivial benefit:

• It must cost £50 or less.
• It can’t be cash or a cash voucher.
• It can’t be a reward for work or performance.
• It can’t form part of the employee’s contractual entitlement.

Directors of close companies are also subject to an overall £300 annual cap on qualifying trivial benefits.

General Office Purchases

Small everyday purchases needed to run your office can generally be claimed.

These might include:

• Stationery
• Postage
• Printer ink
• Computer accessories
• Other small office supplies

If an employee personally pays for something needed for work, the company can usually reimburse them where the expense qualifies.

Home-Office Costs and Use of Home as an Office

If you regularly work from home, your company may be able to reimburse additional household expenses incurred because of your work.

These could include additional:

• Heating
• Electricity
• Metered water
• Business telephone calls
• Certain internet costs

Where the relevant conditions are met, employers can pay £6 per week or £26 per month without requiring evidence of the exact additional costs.

Alternatively, reasonable actual additional costs can be reimbursed where they can be evidenced.

From 6 April 2026, employees can no longer claim an Income Tax deduction directly from HMRC for unreimbursed additional household costs. This doesn’t prevent employers from reimbursing qualifying homeworking costs tax-free.

Renting Part of Your Home to Your Limited Company

Another option for some directors is to formally rent part of their home to the company.

If you do this:

• Record the arrangement properly.
• Put a rental agreement in place.
• Charge a commercially reasonable rent.
• Consider how and when the space is used by the company.

The rent you receive personally will also need to be considered for tax purposes.

There can be wider Income Tax and Capital Gains Tax implications, particularly where part of the property is used exclusively for business, so take professional advice before setting up an arrangement.

Hire Purchase Agreements

Assets don’t always need to be purchased outright.

If your limited company acquires qualifying equipment through hire purchase, capital allowances may be available when the asset is brought into use.

The finance interest and charges are treated separately from the capital cost of the asset.

The agreement should be entered into by the company where the company is acquiring the asset.

Mobile, Telephone, Landline and Broadband Expenses

Your company may be able to claim telephone and broadband costs used for business.

A company can generally provide an employee with one mobile phone or SIM card without creating a taxable benefit where the contract is between the company and the supplier.

Personally held phone and broadband contracts can be more complicated. Where a director or employee is reimbursed, the tax treatment depends on the circumstances and the business/private use.

Medical or Health Insurance and Private Health Check-Ups

A company can pay for private medical insurance for directors and employees, but it will generally be treated as a taxable Benefit in Kind.

The company will usually need to report the benefit and pay the relevant employer National Insurance.

Certain medical benefits receive different treatment. For example, qualifying employer-provided health screening and medical check-ups can be exempt, subject to HMRC’s conditions.

The rules are specific, so don’t assume all healthcare expenditure receives the same tax treatment.

Professional Subscriptions and Professional Fees

Subscriptions to relevant professional organisations and trade bodies can potentially qualify where they meet HMRC’s conditions.

For employee subscriptions, the organisation will generally need to appear on HMRC’s approved list and the membership must be relevant to the person’s work.

Professional fees paid by the company to accountants, solicitors and other advisers may also be deductible where they relate directly to the trade and aren’t capital in nature.

Keep clear records explaining what professional services were provided and why.

Pension Contributions for Employees and Directors

Employer pension contributions can potentially be an allowable company expense, subject to the relevant conditions.

The standard pension Annual Allowance is currently £60,000, although an individual’s available allowance can be affected by their income, previous pension contributions and whether they have flexibly accessed pension benefits.

A tax exemption remains available for qualifying employer-funded pensions advice, subject to the current conditions and limit.

Relocation Expenses

If an employee needs to relocate because of their job, the company may be able to pay or reimburse qualifying relocation expenses tax-free.

Up to £8,000 of qualifying relocation costs per move can currently be exempt.

Qualifying costs can include certain expenses relating to:

• Selling an existing home
• Buying a new home
• Moving belongings
• Travel and temporary accommodation
• Bridging loans
• Replacement domestic items in certain circumstances

Specific conditions and deadlines apply.

Read DNS’s more detailed guide on how to pay relocation expenses to employees without creating a tax charge.

Relevant Life Insurance

A Relevant Life Policy allows a company to provide qualifying life cover for a director or employee.

The company pays the premiums and, where the relevant conditions are satisfied, this can provide a tax-efficient alternative to the individual paying for life cover from their post-tax income.

Benefits are normally paid through an appropriate trust to the employee’s beneficiaries rather than to the company itself.

Relevant Life Policies have specific tax and policy requirements, so professional advice is recommended before arranging cover.

Salaries

Salaries paid to directors and employees are generally allowable business expenses.

The company may also be able to deduct associated employer costs, including employer National Insurance and qualifying pension contributions.

However, there’s no longer one simple National Insurance threshold that can be used to say a particular salary is automatically the most tax-efficient.

For 2026/27, different thresholds apply for employee and employer National Insurance, and factors such as Employment Allowance can also affect the company’s position.

Directors should therefore consider salary alongside dividends, pensions and their wider personal tax circumstances.

Stationery, Postage and Printing Costs

Everyday stationery and printing costs used for business can generally be claimed.

This could include:

• Postage
• Paper
• Envelopes
• Printer ink
• Printing services
• Other stationery supplies

Employees who personally purchase qualifying items for work can usually be reimbursed by the company.

Training Expenses Through Your Limited Company

Your company can pay for training that helps directors or employees develop skills and knowledge relevant to their work.

That could include professional courses, technical training or learning designed to improve or update existing skills.

What About Overseas Training?

Where training takes place overseas, the business purpose of the trip needs to be clear. Keep evidence such as the course itinerary, dates, training schedule and details showing how the training relates to the person’s work.

If an overseas trip combines business training with a holiday or other significant personal purpose, the tax treatment can become more complicated.

Qualifying travel and accommodation costs associated with business training may also be covered, subject to the usual rules.

Make Sure You’re Claiming the Right Limited Company Expenses

Keeping track of allowable expenses isn’t just about reducing your Corporation Tax bill. It also gives you a much clearer picture of what your company is spending and how profitable it really is.

The rules aren’t always black and white, though. An expense that qualifies in one situation could receive completely different tax treatment in another.

That’s why good records and up-to-date advice matter.

At DNS Accountants, we can help you identify allowable business expenses, organise your records and make sure your company claims the tax relief it’s entitled to without falling foul of HMRC rules.

Want to make sure your company is claiming the right expenses? Book a consultation or contact us today on 03300 88 66 86 or email [email protected]

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