A limited company can claim any cost incurred wholly and exclusively for the business, which reduces the profit corporation tax is charged on. The common claimable categories are salaries and employer pension contributions, business travel and mileage — 55p per mile for the first 10,000 business miles, then 25p, for 2026/27 (gov.uk), equipment and computers, business insurance, accountancy and software, business phone and broadband (for business use), and marketing. There are also director-specific perks worth knowing: trivial benefits of £50 or less each, capped at £300 a year for directors of a close company (gov.uk). The governing test is whether a cost is genuinely for the trade — anything with a private element is restricted or disallowed. Get that test right and every legitimate pound of expense cuts the profit taxed at 19% or 25%.
Figures are for the 2026/27 tax year and sourced to gov.uk; they change at each Budget. This is general guidance, not personal tax advice.
What counts as an allowable business expense?
The single rule that decides whether a cost is allowable is the "wholly and exclusively for the purposes of the trade" test. If the spend exists only because of the business, it usually reduces your taxable profit; if it has a private purpose mixed in, HMRC either restricts it or refuses it. That test, rather than any tidy list, is what an accountant applies to each line in your accounts.
In practice, the costs most limited companies put through fall into a handful of categories. The table below sums up the common ones and the catch on each.
Category
Notes
Salaries & employer pension
Director/staff salaries and employer pension contributions are deductible where wholly and exclusively for the trade
Business travel & mileage
Trips for work; mileage at the approved rate (see below); ordinary commuting is excluded
Equipment & computers
Laptops, tools and kit used for the business
Business insurance
Cover taken out for the trade
Accountancy & software
Fees and subscriptions used to run the company
Phone & broadband
The business-use portion of phone and internet
Marketing
Advertising, website and promotion costs
Each of these works the same way: it is deducted from your income before corporation tax is calculated, so the company is taxed on profit after the cost, not before. None of it is money back in your pocket pound-for-pound — it lowers the tax bill, which is a different and smaller saving.
If you are still deciding how to take money out of the company alongside claiming costs, our guide on how to pay yourself from a limited company sets out the salary-and-dividend side that sits next to this.
A few allowable costs are bigger or more director-specific than new directors expect, and the figures matter.
Mileage is the standout for 2026/27. If you use your own car or van for business journeys, the company can pay you the approved mileage allowance: 55p per mile for the first 10,000 business miles in the tax year, then 25p per mile above that; motorcycles are 24p and bicycles 20p (gov.uk). Most guides still quote 45p — that is out of date. The rate rose for 2026/27, so anyone clocking up business miles is now claiming more per mile than last year. Keep a log of the journeys and the reason for each.
Trivial benefits are the small perk directors most often miss. The company can give a non-cash benefit costing £50 or less without it being taxed, as long as it is not cash or a cash voucher, not a reward for work, and not something you are contractually entitled to. For directors of a close company — which most owner-managed limited companies are — there is an annual cap of £300 (gov.uk). Six £50 benefits across the year is the practical shape of it.
Employer pension contributions paid by the company into a director's pension are generally an allowable business expense where they meet the wholly-and-exclusively test — a route many directors use to move profit out tax-efficiently. The detail depends on your wider position, so it is one to set up with an adviser rather than guess at.
Business phone and broadband can go through the company for the business-use portion, and equipment such as a laptop bought for the work is claimable. The recurring theme is private use: the cleaner the business purpose, the simpler the claim.
New directors ask us first what they can actually put through the company — and the honest answer is less aggressive than the internet suggests, but the legitimate list is longer than they think. If you want a partner accountant to draw the line on your specific costs, that is exactly the introduction we make.
This is where directors get caught, so it is worth being blunt about the limits.
Client entertaining is not deductible for corporation tax. You can pay for it through the company, but it does not reduce the company's taxable profit — a common and expensive misunderstanding. Ordinary commuting — travelling between home and a regular workplace — is not an allowable business journey, which is why the mileage rules apply to genuine business trips, not the daily run to the same office.
Dual-purpose costs are the grey area. Anything used both privately and for the business — a phone, a car, a room at home — only counts to the extent of the business use, and you need a reasonable basis for the split. Trying to claim the whole of a mixed-use cost is the fastest way to a problem if HMRC looks.
Working from home is the one to treat carefully for 2026/27. A company can reimburse a director's reasonable additional household costs of working from home, but the rules here are in flux: gov.uk states the employee personal working-from-home relief route cannot be claimed from 6 April 2026, and the area is changing (gov.uk). Rather than quote a flat weekly figure that may no longer apply, get the home-working position checked against your circumstances before you claim it.
How do expenses actually save you tax?
Each £1 of allowable expense reduces the profit your company pays corporation tax on, so the saving is the corporation-tax rate on that pound — 19% for profits up to £50,000, or 25% above £250,000, with marginal relief in between (gov.uk). In other words, a £1,000 allowable cost in a company paying the 19% small-profits rate cuts the tax bill by roughly £190, not £1,000. That is the part the "write it off" framing gets wrong — an expense is worth its tax rate, not its full value.
That maths is illustrative and depends on your profit level and circumstances; it is not a guaranteed saving. The point still holds: claiming everything you are genuinely entitled to, and nothing you are not, is legitimate tax planning within HMRC's rules — never about hiding income. Whether the admin of tracking it all is worth handling yourself or handing over is a fair question, and our guide on whether you need an accountant for a limited company weighs it up. For how expenses sit alongside the tax on profit you draw, see our explainer on dividend tax for 2026/27.
Claiming well is not about being aggressive — it is about applying one test consistently and keeping the records to back it. Get the wholly-and-exclusively line right and the rest follows. If you would rather have a partner accountant set that up properly from the start, we will match you with one through our accountancy network.
What expenses can I claim through my limited company?
Any cost incurred wholly and exclusively for the business — salaries and employer pension contributions, business travel and mileage, equipment, business insurance, accountancy and software, the business-use portion of phone and broadband, and marketing. There are also director perks such as trivial benefits. Each reduces the profit your company pays corporation tax on.
Can I claim mileage through my limited company?
Yes. For 2026/27 the approved rate is 55p per mile for the first 10,000 business miles, then 25p per mile, for cars and vans (24p for motorcycles, 20p for bicycles). Keep a log of each business journey and its purpose. Note this rose from the older 45p figure many guides still quote.
Can I put my phone bill through my company?
You can claim the business-use portion of a phone and broadband. If the line is used privately as well, only the business proportion is allowable, so you need a reasonable basis for the split. A phone contract taken out in the company's name and used for the business is cleaner than putting part of a personal bill through.
What expenses are not allowable for corporation tax?
Client entertaining is not deductible for corporation tax even if the company pays for it. Ordinary commuting between home and a regular workplace is not an allowable business journey, and any cost with a private element is restricted to the business-use share. Trying to claim a mixed-use cost in full is the most common error.
Can a director claim for working from home?
A company can reimburse a director's reasonable additional household costs of working from home, but the rules are changing for 2026/27 — gov.uk states the employee personal working-from-home relief route cannot be claimed from 6 April 2026. Rather than rely on a flat weekly figure, get your home-working position checked before you claim it.
A limited company can claim any cost incurred wholly and exclusively for the business, which reduces the profit corporation tax is charged on. The common claimable categories are salaries and employer pension contributions, business travel and mileage — 55p per mile for the first 10,000 business miles, then 25p, for 2026/27 (gov.uk), equipment and computers, business insurance, accountancy and software, business phone and broadband (for business use), and marketing. There are also director-specific perks worth knowing: trivial benefits of £50 or less each, capped at £300 a year for directors of a close company (gov.uk). The governing test is whether a cost is genuinely for the trade — anything with a private element is restricted or disallowed. Get that test right and every legitimate pound of expense cuts the profit taxed at 19% or 25%.
Figures are for the 2026/27 tax year and sourced to gov.uk; they change at each Budget. This is general guidance, not personal tax advice.
What counts as an allowable business expense?
The single rule that decides whether a cost is allowable is the "wholly and exclusively for the purposes of the trade" test. If the spend exists only because of the business, it usually reduces your taxable profit; if it has a private purpose mixed in, HMRC either restricts it or refuses it. That test, rather than any tidy list, is what an accountant applies to each line in your accounts.
In practice, the costs most limited companies put through fall into a handful of categories. The table below sums up the common ones and the catch on each.
Category
Notes
Salaries & employer pension
Director/staff salaries and employer pension contributions are deductible where wholly and exclusively for the trade
Business travel & mileage
Trips for work; mileage at the approved rate (see below); ordinary commuting is excluded
Equipment & computers
Laptops, tools and kit used for the business
Business insurance
Cover taken out for the trade
Accountancy & software
Fees and subscriptions used to run the company
Phone & broadband
The business-use portion of phone and internet
Marketing
Advertising, website and promotion costs
Each of these works the same way: it is deducted from your income before corporation tax is calculated, so the company is taxed on profit after the cost, not before. None of it is money back in your pocket pound-for-pound — it lowers the tax bill, which is a different and smaller saving.
If you are still deciding how to take money out of the company alongside claiming costs, our guide on how to pay yourself from a limited company sets out the salary-and-dividend side that sits next to this.
A few allowable costs are bigger or more director-specific than new directors expect, and the figures matter.
Mileage is the standout for 2026/27. If you use your own car or van for business journeys, the company can pay you the approved mileage allowance: 55p per mile for the first 10,000 business miles in the tax year, then 25p per mile above that; motorcycles are 24p and bicycles 20p (gov.uk). Most guides still quote 45p — that is out of date. The rate rose for 2026/27, so anyone clocking up business miles is now claiming more per mile than last year. Keep a log of the journeys and the reason for each.
Trivial benefits are the small perk directors most often miss. The company can give a non-cash benefit costing £50 or less without it being taxed, as long as it is not cash or a cash voucher, not a reward for work, and not something you are contractually entitled to. For directors of a close company — which most owner-managed limited companies are — there is an annual cap of £300 (gov.uk). Six £50 benefits across the year is the practical shape of it.
Employer pension contributions paid by the company into a director's pension are generally an allowable business expense where they meet the wholly-and-exclusively test — a route many directors use to move profit out tax-efficiently. The detail depends on your wider position, so it is one to set up with an adviser rather than guess at.
Business phone and broadband can go through the company for the business-use portion, and equipment such as a laptop bought for the work is claimable. The recurring theme is private use: the cleaner the business purpose, the simpler the claim.
New directors ask us first what they can actually put through the company — and the honest answer is less aggressive than the internet suggests, but the legitimate list is longer than they think. If you want a partner accountant to draw the line on your specific costs, that is exactly the introduction we make.
This is where directors get caught, so it is worth being blunt about the limits.
Client entertaining is not deductible for corporation tax. You can pay for it through the company, but it does not reduce the company's taxable profit — a common and expensive misunderstanding. Ordinary commuting — travelling between home and a regular workplace — is not an allowable business journey, which is why the mileage rules apply to genuine business trips, not the daily run to the same office.
Dual-purpose costs are the grey area. Anything used both privately and for the business — a phone, a car, a room at home — only counts to the extent of the business use, and you need a reasonable basis for the split. Trying to claim the whole of a mixed-use cost is the fastest way to a problem if HMRC looks.
Working from home is the one to treat carefully for 2026/27. A company can reimburse a director's reasonable additional household costs of working from home, but the rules here are in flux: gov.uk states the employee personal working-from-home relief route cannot be claimed from 6 April 2026, and the area is changing (gov.uk). Rather than quote a flat weekly figure that may no longer apply, get the home-working position checked against your circumstances before you claim it.
How do expenses actually save you tax?
Each £1 of allowable expense reduces the profit your company pays corporation tax on, so the saving is the corporation-tax rate on that pound — 19% for profits up to £50,000, or 25% above £250,000, with marginal relief in between (gov.uk). In other words, a £1,000 allowable cost in a company paying the 19% small-profits rate cuts the tax bill by roughly £190, not £1,000. That is the part the "write it off" framing gets wrong — an expense is worth its tax rate, not its full value.
That maths is illustrative and depends on your profit level and circumstances; it is not a guaranteed saving. The point still holds: claiming everything you are genuinely entitled to, and nothing you are not, is legitimate tax planning within HMRC's rules — never about hiding income. Whether the admin of tracking it all is worth handling yourself or handing over is a fair question, and our guide on whether you need an accountant for a limited company weighs it up. For how expenses sit alongside the tax on profit you draw, see our explainer on dividend tax for 2026/27.
Claiming well is not about being aggressive — it is about applying one test consistently and keeping the records to back it. Get the wholly-and-exclusively line right and the rest follows. If you would rather have a partner accountant set that up properly from the start, we will match you with one through our accountancy network.
What expenses can I claim through my limited company?
Any cost incurred wholly and exclusively for the business — salaries and employer pension contributions, business travel and mileage, equipment, business insurance, accountancy and software, the business-use portion of phone and broadband, and marketing. There are also director perks such as trivial benefits. Each reduces the profit your company pays corporation tax on.
Can I claim mileage through my limited company?
Yes. For 2026/27 the approved rate is 55p per mile for the first 10,000 business miles, then 25p per mile, for cars and vans (24p for motorcycles, 20p for bicycles). Keep a log of each business journey and its purpose. Note this rose from the older 45p figure many guides still quote.
Can I put my phone bill through my company?
You can claim the business-use portion of a phone and broadband. If the line is used privately as well, only the business proportion is allowable, so you need a reasonable basis for the split. A phone contract taken out in the company's name and used for the business is cleaner than putting part of a personal bill through.
What expenses are not allowable for corporation tax?
Client entertaining is not deductible for corporation tax even if the company pays for it. Ordinary commuting between home and a regular workplace is not an allowable business journey, and any cost with a private element is restricted to the business-use share. Trying to claim a mixed-use cost in full is the most common error.
Can a director claim for working from home?
A company can reimburse a director's reasonable additional household costs of working from home, but the rules are changing for 2026/27 — gov.uk states the employee personal working-from-home relief route cannot be claimed from 6 April 2026. Rather than rely on a flat weekly figure, get your home-working position checked before you claim it.
