It's perfectly acceptable to put the cost of trade or business insurance on your books - liability, goods and contents, offices and shops for example. But have you claimed them all? What can you justifiably claim?

Let's start with the obvious ones. Any cover that you clearly have to have to run your business can be claimed as a business expense. It's worth checking that you're putting them all on your accounts as it lowers your profit, meaning you pay less tax.

Trade and business policies

• Public Liability - can include tool cover for trades
• Employers' Liability - indemnifies companies against claims from employees
• Professional Indemnity - protects you against negligence claims
• Directors & Officers - protects senior staff against claims arising from the company's actions
• Business premises - offices, warehouses, shops etc, stock and contents options

Any of the above are bona fide business expenses but depending on your business and the way it's run, there are others that could be claimed against a business.

Property insurance

As an example, someone using a business framework to run a let property portfolio would be able to claim the premiums for related insurance. This could include:

• Buildings
• Contents
• Unoccupied Property
• Rent Guarantee Cover
• Legal Expenses Cover
• Emergency Breakdown Cover

Of course they would only be eligible as business expenses for properties that are let out - they wouldn't be able to put the property and contents insurance premiums for their own home on the balance sheet.

Vehicles

The administration of using vehicles for business can be a bit of a minefield so it's worth extra attention.

If you're self-employed and have a vehicle .... for your work .... you can claim the insurance premium as a business expense.

If you're self-employed and have a vehicle that you can reasonably prove is used only for your work, like a van, you can claim the insurance premium as a business expense.

If you have a car that you use for social domestic and pleasure but then have to bump the policy up to cover business use, you should be able to claim that extra expenditure.

Full cost versus mileage method

But in both those cases you'll need to be operating what's known as the 'full cost' method of claiming. This means you detail every vehicle-related expense and at the end of the year deduct a percentage for any private use of the vehicle you might have made.

The mileage method is far simpler, particularly if you have vehicles that you use for both private and work-related travel. You simply record your business trips and claim an amount per mile (currently HMRC approves 45p per mile up to 10,000 miles and then 25p per mile on top). But if you do this the mileage allowance is deemed to cover all your vehicle-related expenses, so you can't put the insurance on the books - you'd be double-claiming.

It's also worth pointing out that you're specifically not allowed to claim parking and traffic fines!

Find out more

Please be aware that there are complicated tax implications for some businesses that need to be taken into consideration, so take advice from your accountant or tax advisor before making changes, just in case.

If you need to find out more about specific policies you could benefit from, feel free to contact the team on 01608 647631 or visit the Insure My Liability website.

Related articles

Monthly Newsletter

Not signed up to our monthly newsletters and would like to keep up to date with a variety of products? Select from below which products you would like to receive.

Caravan Boat Property Personal Business

Please enter a valid email address

Subscribe