Limited company guide
What a limited company can and cannot deduct, with the areas HMRC looks at most closely.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityA cost is deductible if it is incurred wholly and exclusively for the purposes of the trade. Where a cost has a genuine business part that can be identified, that part can often be claimed.
The test
Commonly allowable
Commonly disallowed or restricted
A cost is deductible if it is incurred wholly and exclusively for the purposes of the trade. Where a cost has a genuine business part that can be identified, that part can often be claimed.
Keep the evidence: an invoice, what it was for, and why it was needed for the business.
Salaries and employer National Insurance, employer pension contributions, subcontractor costs, software and subscriptions used for the business, professional fees, business insurance, business travel and accommodation, training that updates existing skills, and equipment through capital allowances.
Client entertaining is never deductible for corporation tax. Ordinary commuting is not business travel. Everyday clothing is not deductible even if you only wear it for work. Fines and penalties are not deductible.
Home working can be claimed either through a flat rate or a reasonable apportionment of household costs supported by calculations, and a formal licence between director and company avoids awkward questions.
Thresholds, rates and deadlines quoted here reflect the 2026/27 UK position. Check current GOV.UK guidance, or ask us, before you rely on them for your own company.
Local help
We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.
Frequently asked
Yes, if it is used for the business. Incidental private use of company equipment is generally accepted without a benefit charge.
Up to £150 per head per year for annual events is exempt from a benefit charge, provided it is open to all staff. Exceed it by a pound and the whole amount becomes taxable.
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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Pick a time that suits you and a qualified accountant will call you about your company, deadlines and fees.
Appointments run monday to friday, 9:00am to 5:30pm. Your confirmation is emailed straight away.
