Many entrepreneurs have got problems with expenses qualification which can be counted as costs of running a business. Inappropriate expenses qualification may lead to the revenue inspection and penalties. It is worth to get to know operative regulations.
Which expenses can we figure in company’s costs?
Fundamental expense associated with company running is maintaining corporate venue. Every entrepreneur can figure in into costs corporate venue rent and exploitation costs associated with utilization (gas, power, rubbish clearance).Insurance policy of venue or building in which company is being run and costs connected with its protection (e. g. security company bills) can also be figured in as business expenses. Other costs are connected with the business itself.
What I mean is phone bills, proper software purchase, all costs associated with maintenance and office equipment. Fundamental cost for each company are also employees’ salaries and bills for fee-for-task agreement or specific-task contract (gross sums are taken into consideration). Every entrepreneur can figure in into business costs loan payments or leasing instalment (interest instalment), costs connected with company car exploitation and costs borne during business trips (transport, accommodation, nourishment).
Moreover in business running costs you can also figure in products or raw materials purchase expenses. Another group of costs are invoices for accounting offices or legal offices, money spent on promotion activities (advertisements), website running costs and many other expenses essential for company running.
What we cannot figure in the costs?
In company running costs you cannot figure in all costs which do not have direct impact with the business you are running. Entrepreneur cannot include his own salary, his insurance contributions, transport costs or any penalties (e. g. tickets).
Another group of expenses which cannot be figured in the costs of company running is permanent assets purchase and connected with this transaction additional fees and costs of their amortisation. Regulations do not forecast parts of company’s credit capital or loan. Polish tax law does not also count foundation remittances as costs of company running.
Problematic situations
Many entrepreneurs do not know how to count costs of flat or house exploitation for company’s purpose. Well, as costs of business you can count only a part of expenses (rent, property tax, electricity, gaz). Expenses that overrun £250 per year must be properly documented.
There is similar situation with using private car for business purposes. You need to have mileage record and costs counted on the grounds of it. In case of cars quantity of miles is being multiplied by £0,45 or £0,25.
