What expenditure can I include in my sole trade accounts for a business I set up in 2014?

A: Revenue Commissioners view on this is that expenditure claimed must be revenue in nature and not capital, incurred wholly and exclusively for the purposes of the trade and not specifically disallowable.

1. Revenue in nature and not capital – This means expenditure incurred on for example fixtures and fittings for an office, should not be deducted when calculating the taxable profits. Instead this is treated as capital in nature and the company will receive a deduction over 8 years, referred to as a capital allowance.


2. Wholly and exclusively – If the expenditure incurred is not entirely for the purpose of the trade it should be disallowed. For example private meals and accommodation.


3. Not specifically disallowable – For example revenue states that client expenditure is not allowable as a deduction when calculating your taxable profits. Also revenue interest, parking fines etc. are not allowable.   

 

If you work from home you may be able to claim a portion of personal expenditure, with reference to the business work carried out. For example if you have an office at home the costs of internet, telephone, light and heat may be allowable, restricted to the lower of the square footage of the room or 5% - 10% of the invoice.

 

Date published 17 Jul 2015

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