What if you could reduce your business’s tax bill by simply knowing which expenses to claim? 

Every year, countless UK business owners unknowingly miss out on deductions they’re entitled to, paying more tax than they need to. 

It’s not always about finding a loophole or doing something complex. 

Often, it’s just about knowing what counts as a claimable expense and keeping the right records. 

Getting those details right can make a big difference to your bottom line. 

At Red Fish Accountancy, we help businesses understand their finances and make better tax decisions. Whether it’s bookkeeping, tax returns, payroll, or business advice, we work closely with our clients to make things easier.

Can You Claim Home Office Expenses for Your Business?

Working from home has become increasingly common, especially for small business owners, freelancers and sole traders. 

According to data from the UK’s Office for National Statistics, over 40 percent of working adults reported working from home at least some of the time in recent years. 

If you’re one of them and you use part of your home exclusively for your business, you may be able to claim a portion of your household bills as allowable business expenses.

This can include things like heating, electricity, water, broadband, and even part of your rent or mortgage interest. 

The key here is how much space you use and how often it’s used solely for work. 

HMRC allows you to calculate this by working out the percentage of your home used for business purposes and applying that percentage to your overall household costs. 

So, if your dedicated workspace takes up 10 percent of your home’s floor area, you can usually claim 10 percent of the bills connected to it.

Some business owners choose to use HMRC’s simplified expenses method instead, which provides a flat rate based on the number of hours worked from home each month. 

While this can be easier to manage, it might not always offer the most savings compared to the actual cost method. 

That’s why it’s worth reviewing both options.

Home Office Expenses for Your Business

Did You Know Loan Interest Can Be Deducted?

If your business has ever relied on borrowed funds to manage cash flow, invest in equipment or cover start-up costs, you’re not alone. 

A 2023 British Business Bank survey reported that 36 percent of small businesses in the UK had used external finance in the past year. 

What many business owners don’t always realise is that the interest paid on these loans can often be claimed as a business expense.

Even if you’ve taken out a traditional bank loan, used an overdraft facility or rely on a business credit card, the interest on these forms of borrowing is usually tax-deductible. 

This means that if the loan is used strictly for business-related purposes, you can claim back the interest paid, which reduces your overall taxable income. 

For example, if your business paid £1,200 in loan interest over the year, and you qualify to deduct the full amount, that’s £1,200 less you’ll be taxed on.

But there’s an important condition here: the funds must be used wholly and exclusively for business. 

If you took out a loan and used half of it for business and half for personal expenses, you can only claim the business portion of the interest. 

HMRC is clear about this, and they may ask for supporting documents to show how the money was spent. 

That means keeping detailed records, not just the loan agreement, but also how you’ve used the funds over time.

Have You Considered Deductions for Bad Debts?

If your business has supplied goods or delivered services but never received payment, you may be able to claim that unpaid amount as a bad debt expense. 

It is never a good feeling when a customer fails to pay, especially after you have put in the time, resources and effort to meet your end of the agreement. 

But the good news is that HMRC allows you to deduct certain bad debts from your taxable income, which helps ease the financial hit.

To claim a bad debt, you need to show that you have made genuine efforts to recover the money. 

This could include sending reminders, following up with phone calls, issuing formal letters or even taking legal action if appropriate. 

It is not enough to simply mark an invoice as unpaid and write it off. 

HMRC will expect some kind of documentation proving that the debt was real, that it was included in your income, and that it has since become irrecoverable.

For limited companies, the deduction is usually claimed through your Corporation Tax return. 

For sole traders and partnerships, it is included in your income tax calculation. 

In all cases, having a reliable system for tracking unpaid invoices is crucial. The longer overdue a debt becomes, the harder it often is to collect. 

So, checking your accounts receivable regularly and addressing unpaid bills early can make a big difference.

Are You Aware of Capital Allowances?

When your business invests in assets like equipment, tools, machinery, or company vehicles, those purchases may qualify for capital allowances. 

Unlike everyday expenses, which you can deduct fully in the year they occur, larger assets are considered long-term investments. 

Capital allowances allow you to claim back the cost of these items gradually, as they wear out or lose value over time.

In most cases, you can deduct a portion of the asset’s value each year against your profits, which lowers your overall tax bill. 

This process is known as writing down the value of the asset. 

For certain types of purchases, you might even be able to claim the full amount in the first year using the Annual Investment Allowance, which currently allows businesses to deduct up to £1 million worth of qualifying purchases in a single year. 

This can be a big help if you’re making a large investment and want to get immediate tax relief.

It’s not just the big items that count. Desks, laptops, vans, printers, and even software or security systems might be eligible, depending on how you use them in your business. 

The key is that the item must be used solely for business activities.

Are You Utilising Research and Development (R&D) Tax Credits?

If your company is involved in innovative projects, you may be eligible for R&D tax credits. 

These credits can significantly reduce your tax bill or even result in a cash payment from HMRC. 

Activities that seek to achieve an advance in science or technology, even if unsuccessful, can qualify. 

Documenting your R&D activities thoroughly is crucial to support your claim. ​

Financial planning and tax saving

How Can Professional Fees and Subscriptions Be Deducted?

Running a business often means seeking expert help, whether that is from a solicitor, accountant, consultant or industry body. 

The good news is that HMRC allows many of these costs to be deducted from your taxable income, which means you may be paying less tax simply by claiming what you are already spending to keep your business running smoothly.

Professional fees for services that are directly related to your business operations — like legal advice, accountancy support or even consultancy services — are considered allowable expenses. 

These are not optional extras. In many cases, they are vital to making informed decisions, meeting legal requirements and staying compliant. 

For example, if you hire an accountant to file your company tax return, the fees for that service can be deducted as a business expense.

Similarly, if you or your staff are members of a recognised professional body, the subscription fees may also be deductible. 

HMRC maintains a list of approved organisations whose fees qualify for tax relief. These can include industry specific bodies, regulatory agencies and trade associations. 

As long as the membership is relevant to your role or your business activity, the cost can be included in your tax calculations.

According to a recent survey by the Federation of Small Businesses, professional fees are among the top five categories of business expenses for small and medium sized enterprises in the UK. 

That means many business owners are already paying these costs but not always claiming them correctly. 

If you are unsure which fees qualify, keep a clear record of all invoices and payments for professional support throughout the year. 

That way, when it is time to file your return, you have the evidence you need to claim what you are entitled to. 

These small savings can add up, especially for businesses working with limited budgets or during periods of growth.

Keep More of What You Earn: Let the Right Deductions Do the Work

Paying tax is part of doing business, but overpaying is not. 

The truth is, many business owners across the UK are missing out on deductions they could rightfully claim simply because they are unaware of them or unsure how they work. 

Even if it is claiming for a home office, deducting loan interest, writing off bad debts or making use of capital allowances, these expenses can make a real difference to your bottom line.

At Red Fish Accountancy, we believe that managing your tax properly is not just about meeting deadlines or ticking boxes. 

It is about making sure you are keeping more of what you earn. 

We work with businesses to help them understand where they are losing money through missed claims and what steps they can take to change that. 

No jargon, no confusion, just clear advice that supports your business goals.

The tax system might seem complicated, but you do not have to figure it all out on your own. By understanding which deductions apply to your business and keeping accurate records throughout the year, you can reduce stress, avoid costly mistakes and feel more in control of your finances. 

If you are unsure where to begin, we are always here to help you take a closer look. Because when you claim more, you pay less, and that simply makes good business sense.