Question

Explain allowed expenses for business​

Answer 1

Answer:

Allowable expenses are not considered part of a company’s taxable profits; you therefore don't pay tax on these expenses. For example, a company has an annual turnover of £15,000. They spend £2,000 on allowable expenses. They only pay tax on the remaining £13,000.

Most small businesses can claim allowable expenses, but there are a few exceptions. You can’t claim allowable expenses if you use the £1,000 tax-free ‘trading allowance’, and separate rules apply to limited companies.

Answer 2

An expense is the cost of operations that a company incurs to generate revenue. As the popular saying goes, “it costs money to make money.” Common expenses include payments to suppliers, employee wages, factory leases, and equipment depreciation