Tax return time - what you can and cannot claim in your tax return

It’s the number one question that all accountants get asked each year – what expenses can I claim in my tax return?

The general rule is that in order for an expense to be allowable it must be directly related to the running of the business.

What expenses can be claimed:

• Any goods that you buy for resale.
• Employees' pay.
• Rent and bills for your business premises.
• Running costs for vehicles or machines that you use in your business.
• Lease payments for vehicles or machines that you use in your business.
• Accountancy fees.
• Interest payments for money you borrowed to finance your business.
• Expenses you had before your business started trading such as the cost of preparing business plans.

What expenses cannot be claimed:

• Personal mileage expenses.
• Food expenses – In the case of an employee on a business trip whereby they are forced to eat out or incur food costs that would not be normal, an allowance may be given to cover these costs.
• Clothing costs – (except protective clothing).
• Accommodation – the cost of accommodation is not allowable. Hotel accommodation incurred on a business trip – where there is no personal motive in the trip – is an allowable deduction.
• Client entertainment
• Capital expenditure – e.g. purchase of equipment. You may be able to claim capital allowances on this expenditure.

Expenses that are for both business and private use

If you spend money on something that is for both business and private use, you can claim a deduction for part of the expense. This would include items such as phone bills, motor expenses and rent. You must work out how much of the expenditure was for business purposes and claim a deduction for that amount only.

Tax Credits

Tax Credits reduce the amount of tax that you have to pay and the credits to which you are entitled are dependent upon your personal circumstances.

Every year, thousands of Euros are left unclaimed by people who are just not aware of the additional tax reliefs that they could be claiming.

For example, if you are married and your spouse stays at home to mind a child then you could claim the Home Carer Tax Credit potentially saving you €1,100 in the 2017 tax return.

Date published 26 Oct 2018

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.