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A Guide to Business Expenses: Insights from Hamollisons Bookkeeping Services

In the field of business finance, understanding which expenses can be claimed back can significantly impact your tax liabilities. Hamollisons Bookkeeping Services is dedicated to guiding businesses through these financial intricacies. Today, we address two critical aspects: allowable and estimated expenses.

Allowable Expenses Explained

Every business incurs costs. Some of these can be deducted before calculating your taxable profit, known as 'allowable expenses'. Common categories include:

  • Office Costs: Rent, utilities, phone bills, and stationery.

  • Travel: Expenses incurred from business trips, including fuel and train tickets.

  • Clothing: Costs for uniforms or necessary protective wear.

  • Staff Expenses: Salaries, bonuses, pension contributions, etc.

  • Marketing: Advertising costs, website maintenance, and other promotional expenses.

  • Training: Courses directly related to the improvement of business operations.

It's essential to maintain records of all transactions to verify these expenses.

Estimated Expenses: An Overview

There are occasions when an expense is incurred, but documentation, like a receipt, is missing. In these scenarios, businesses might resort to 'estimated expenses'.

Here's a brief guideline:

  • Attempt to Reconstruct: Seek a duplicate receipt or cross-reference with bank transactions.

  • Provide an Accurate Estimate: If exact amounts are unobtainable, give the most accurate estimate possible.

  • Document the Process: Keep a record detailing how you derived your estimate.

Consistent and organised record-keeping can minimise the need for estimations.

Understanding and accurately reporting business expenses are paramount for financial accuracy and compliance. Hamollisons Bookkeeping Services remains committed to assisting businesses in these matters. If you need clarity or assistance with your bookkeeping, do not hesitate to contact us.

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