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A guide to small business tax deductions

According to Learndirect, small business in England represent "more than £1 billion to the country's economy every year." Starting a small business,as well as running one, takes a lot of work and time. When it is time to submit ones taxes to the government, it is helpful to know what deductions a small business can submit.

Transportation

Business tax deductions One of the small business tax deductions has to do with transportation. Sole owners and partners in a business may include some costs associated with running a car. According to Tax Cafe, these costs can include some "running costs, including petrol, insurance, road tax, repairs and maintenance, based on their annual business mileage." The business mileage refers to mileage travelled while working - not the commute to and from home. Travel mileage, if the car is owned by the business owner, can be deducted at a rate of 40p for up to 1100 miles, then 25p per mile thereafter. When you travel during the course of business, then you will be able to deduct the cost of that travel, even if it is out of the country.

The office

The office represents tax deductions. Decorations for the office can be deducted, though spending thousands for antique furniture and paintings can come under scrutiny. If you work out of your home, then the room in which you do that work can be deducted as well. Tax Cafe gives this example: "David could justifiably claim around 24% of his household bills as a business expense. This is because he uses one room out of four for business purposes about 95% of the time." Sole owners and partners of the small business can claim their phones as a tax deduction. Line rentals can also be deducted as well. An office party An office party can be deducted, as long as it is kept below the level of 150 pounds a person. In this manner, your small business can deduct the Christmas party, which is bound to be the largest the company holds. Pensions can be deducted as well, as long as it is within "the relevant contribution limits."

The family

Many small businesses are family-run businesses. This means that it can affect all of the members of the family. Fortunately, there are tax deductions here as well, though Tax Cafe remarks that " Sadly, you cannot claim for the cost of supporting your family." However, if any members of the family receive a salary from the small business, it can be claimed as a business expense. As this may mean that child care may be necessary, child care costs are tax deductible, especially if the child care is on-site of the small business.

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