How to Handle Business Expenses Like a Pro: A UK Tax Guide

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If you’re running a business in the UK—whether it's a side hustle or your full-time gig—keeping track of your business expenses is essential. It helps you stay organised, prevents overpaying tax, and gives a clearer picture of how your business is doing. While it might sound a bit dull at first, knowing what you can and can't claim can actually save you quite a bit of money in the long run. If you’re unsure where to begin, checking out resources like lookdevisservice.uk can give you a good jumpstart.

So, how do you handle your business expenses like a pro? First, know what counts as a business expense. If you spend money on things directly related to running your business, there's a good chance it’s a valid expense. This can include office supplies, travel costs, phone bills, staff wages, software subscriptions, and even a portion of your home bills if you work from home.

Next, keep your receipts and invoices tidy and easy to find. You don’t need a fancy system—a shoebox works just as well as digital folders, as long as you’re consistent. If you prefer going paperless, apps and accounting software can help you snap photos of your receipts and store them digitally.

Another good habit is to separate your business and personal finances. Having a separate business bank account makes it easier to spot business-related spending and cuts down any confusion during tax season.

Speaking of tax, don’t forget about VAT if your business turns over more than £85,000 a year. You’ll need to register and submit VAT returns, which means recording VAT on your invoices and purchases.

Always review your records regularly. Doing a quick monthly review helps spot any missing expenses, ensures things are being recorded correctly, and makes preparing your Self Assessment or company tax return much easier and less stressful.

One last tip: if you’re ever in doubt about whether something counts as a business expense, it’s worth checking with an accountant or HMRC. Getting it wrong can lead to penalties, so it’s better to ask than guess.

Keeping on top of your expenses doesn’t have to be a burden. With a little time and the right habits, you’ll feel more in control of your money—and more confident at tax time.