The justifiable expenses of your company (that is, they make sense given the activity of your company) are tax free, because they are money that gets reinvested in the company. However, in order to deduct them in accounting, they must comply with a series of standards.

Specifically we need that:

  • Have a justification. For example, for an accommodation in AirBnB, that you go to work with a startup, or visit a client, or attend a conference, or spend a month studying a culture for your blog, which is the source of your income.
  • Have a documentary support, that is, an invoice or contract that justifies it. If it is an accommodation of AirBnB for example, a rental contract in the name of the company. In case of an invoice, it must have your company name, registration number, registered office and VAT number (if you have one).
  • Are paid with the company’s card, or its bank account. As an exception, you can pay with out-of-pocket expenses if you can’t pay with your corporate accounts or cards.

Avoid paying any non-deductible expenses (such as food, a pair of jeans or a holidays trip) with your corporate accounts or cards. Such expenses will need to be refunded from your personal finances back to the company’s funds later.

in Running your company

Leave A Comment