Which business expenses can you claim against tax?

Navigating tax deductions for business expenses can be complex, but we've got you covered with a comprehensive guide on what you can claim and what you can't. Claiming tax deductions against business expenses is essential to optimise your operational spending, minimise tax costs, and improve cash flow. Here's a breakdown of what you need to know:

1. Tax-Deductible Business Expenses:

You can claim tax deductions for business expenses that are directly related to earning your assessable income. Here are some examples of eligible expenses:

- Vehicle expenses, transport costs, and travel for business purposes.

- Rent paid on business premises.

- Depreciation on items like computers and office furniture.

- Interest on borrowing money for the business.

- Certain insurance premiums.

- Work-related journals and magazines.

- Membership of professional associations.

- Home office expenses.

- Work-related mobile phones and phone bills.

- Stationery.

- Work uniforms.

- Tax agent's fees.

Remember, the more deductions you can claim, the lower your tax bill will be. However, ensure that you have records to prove the expenses were incurred for business purposes and not for private use.

2. Non-Tax-Deductible Business Expenses:

While many business expenses are tax-deductible, some cannot be claimed against tax. Here are the expenses that do not meet the tax-free criteria:

- The principal portion of loan repayments.

- Speeding tickets or parking fines related to your own or business vehicles.

- Penalties incurred from the IRD due to late filings or payments.

- Purchases of new equipment, machinery, or plant (though depreciation over time may be possible).

- Insurance premiums for life insurance, accident insurance, personal sickness, and mortgage protection insurance.

- Costs incurred in the initial stages of setting up your business.

- Most clothing, footwear, and eyewear, except if required for the role (e.g., uniforms or safety boots).

- Legal costs relating to any capital acquisitions you make.

Be mindful of these non-deductible expenses to avoid any issues with the IRD.

We understand that managing your business expenses and tax obligations can be overwhelming. Our team can assist you in optimising your tax efficiency and identifying important reliefs and incentives provided by the IRD. If you're looking to reduce costs and improve your financial position, reach out to us for personalised assistance.