What Expenses Can You Claim as a Limited Company Director?

Running your own limited company comes with plenty of perks including flexibility, control, and often more tax efficiency. But one of the biggest advantages is the ability to claim business expenses, helping reduce your taxable profit (and ultimately, your Corporation Tax bill).

However, not everything counts as an allowable expense, and HMRC’s rules can be tricky. In this guide, we’ll break down what you can and can’t claim as a limited company director so you can make sure you’re saving money the right way.

The Golden Rule: “Wholly, Exclusively and Necessarily”

HMRC states that for an expense to be claimable, it must be “wholly, exclusively and necessarily” for the purpose of running your business.

That means:
✅ It must be for work, not personal use.
✅ It should be essential for running your company.
✅ You should be able to justify it if HMRC asks.

For example, a laptop used only for business? ✅
A new TV for your home office? ❌

Common Allowable Business Expenses

Here are some of the most common expenses you can claim through your limited company:

1. Office Costs

• Office rent or coworking spaces
  
• Business rates, electricity, and heating (for commercial premises)
  
• Stationery, printing, and postage
  
• Office furniture and equipment
  

💡 If you work from home, you can claim a portion of household bills — more on that below.

2. Working from Home Expenses

If you regularly work from home, you can claim:

• A flat rate of £6 per week (no receipts needed), or
  
• A proportion of household bills (like broadband, electricity, and heating) based on business use.
  

Your accountant can help you calculate what’s reasonable and what HMRC will accept.

3. Travel and Subsistence

You can claim the cost of business travel such as:

• Train, bus, taxi, or parking fees
  
• Mileage for business journeys in your own car (45p per mile for the first 10,000 miles)
  
• Hotels and meals during overnight business trips
  

🚫 Commuting between home and a regular office does not count, only travel to temporary workplaces does.

4. Professional Fees and Subscriptions

• Accountant or legal fees
  
• Business insurance (like Professional Indemnity)
  
• Membership fees for professional bodies (e.g. ICAEW, CIPD)
  
• Training that keeps your skills up to date
  

Training for a new skill, however, may not qualify.

5. Equipment and Technology

You can claim for:

• Computers, laptops, printers, and phones
  
• Software and business apps
  
• Repairs and maintenance
  

If you use them partly for personal use, you’ll need to apportion the business percentage.

6. Marketing and Advertising

• Website design and hosting
  
• Social media ads and online marketing tools
  
• Business cards, leaflets, and branded materials
  

These all count as legitimate business expenses when promoting your company.

7. Staff Costs

If you employ staff (including yourself as a director), you can claim:

• Salaries and bonuses
  
• Employer’s National Insurance
  
• Pension contributions
  
• Staff training and welfare (like coffee, team lunches, or Christmas parties within limits!)
  

8. Business Insurance

Most policies are allowable, including:

• Public Liability
  
• Employer’s Liability
  
• Professional Indemnity
  
• Key Person Insurance
  

They’re all considered essential for protecting your company and clients.

What You Can’t Claim

HMRC won’t allow personal or mixed-use expenses. These include:

• Clothing (unless it’s branded or protective gear)
  
• Client entertainment or personal gifts
  
• Personal holidays disguised as “business trips”
  
• Non-business meals or leisure activities
  

When in doubt, ask: Would I have bought this if I didn’t run my business?

Keep Good Records

Accurate bookkeeping is key. Keep receipts, invoices, and mileage logs for every expense you claim, HMRC can request evidence up to six years later.

Using cloud accounting software like Xero or QuickBooks can make tracking and categorising expenses much easier.

Claiming legitimate business expenses as a limited company director can make a huge difference to your bottom line but it’s important to get it right.

Need help reviewing your expenses or setting up your company accounts?
Our expert team can help you claim confidently and stay on the right side of HMRC.
📞 Get in touch today to see how much you could be saving.