Typical Expenses in a Business – An Accountant’s Perspective

 

Tags – Business Expense Categories

 

We have been asked this question quite frequently: what expense categories can businesses claim for tax purposes. In its purest form, there is no direct answer to this question.

 

Usually, it is sensible to divide the expenses by multiple subcategories and looking at them from a case to case basis. However, for the purpose of creating an ease, here is our general breakdown of business expenses by category.

 

1. Marketing

Whether done internally or outsourced, marketing is a major investment for most businesses.

In most cases, the sales made by an organisation is directly linked to marketing activities. This includes all forms of marketing from digital marketing, SEO or social media marketing, to traditional options.

 

Marketing, as long as connected directly to your business is a typical business category in its own right, where all the money can be claimed as an expense.

 

2. Professional Services

Building upon the idea of outsourcing, if you are using any external services for your business, for instance accounting or legal help, you can claim such expenses back too. Such professional services can be both one off or subscription based.

 

Here, again, all the money spent on the business can be claimed as an expense.

 

3. Office / Business Expenses

Another typical expenses category for businesses is the money spent on an office or your business in general.

Once again, there are multiple sub-items applicable as office or business expenses. Typical examples, which may vary based on your business, include software, hardware, stationary, utility bills, etc.

Similarly, if you had to travel for business, you can include related payments, e.g. flight tickets or parking charges too.

 

Once again, all such expenses can be accounted for in your tax submissions.

 

4. Employee Expenses  and Benefits

Employee expenses and benefits are generally viewed from a purely employee angle. However, even if you are a sole trader, you are entitled to certain expenses and benefits.

Applicable expenses in this case are quite wide.

 

Anything from employee salaries to added benefits, for instance health insurance or a company car, can be included in this category. Similarly, if you are spending money on developing your team, e.g. through training or leisurely activities, all such expenses can be included in your tax submissions.

 

5. Other Expenses

Even after dividing typical business expenses into categories, we are missing multiple acceptable expenses that can be submitted in tax documents. Typical examples here include:

 

 

To learn more about business expense categories, please feel free to get in touch.

And, to learn more about other areas of business expenses, check:

 

  1. Tax Relief for Expenses of Employment – The Share Incentive Plan
  2. 3 Accounting Avenues to Support Property Landlords
  3. Accural Basis Accounting – A Short Tracking Guide

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