You can record any penalties or fines paid by the company only as long as they were incurred exclusively for the purpose of trade. Therefore if you've been fined as a result of breaking the law, you won't be able to claim a deduction for this.

What's included

Late fees or penalties on filing or payment of tax.

Penalties for errors on returns such as understating your tax or misrepresenting your tax liability.

What's not included

HMRC will only charge you a penalty in the event they find an error or mistake was made due to one of the following reasons:

  • Because of a lack of 'reasonable care'

  • It was deliberate - Intentionally sending incorrect information.

  • It was deliberate and concealed.

How is it taxed?

You can't take tax relief on a fine or penalty you have received for breaking the law. If you meet the cost of a parking fine for an employee however you can get tax relief (as long as the employee is taxed for receiving that benefit from you).

Tax tips

No tax relief is available on these costs.

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