This category represents all of those things you pay for the business to keep the lights burning and the kettle plugged in. Also includes things such as taking out the rubbish and other utilities businesses incur.

What's included

The gas, electricity, water or rubbish removal bills your business incurs on its premises.

What's not included

As a contractor or sole director working out of a limited company, your home utility bills do not qualify as a deduction if you do not have a rental agreement in place between yourself and the company.

How is it taxed?

Qualifying utility bills are deducted from your pre-tax profit.

Tax tips

Single person limited companies - Make sure to prepare a rental agreement and include a realistic rent amount that includes covering the costs of utility bills as well. HMRC rules are complex on this matter and will expect any calculation to be 'fair and reasonable'.

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