Indie Dev’ Guide 12: Business Expenses
- Indie Dev Guides Introduction
- Guide 1: Limited Companies
- Guide 2: Personal Tax
- Guide 3: VAT
- Guide 4: Payroll and Workplace Pensions (Auto Enrolment)
- Guide 5: Digital Tax Accounts and Software
- Guide 6: Funding your Prototype
- Guide 7: Corporation Tax
- Guide 8: R&D Tax Relief
- Guide 9: Video Games Tax Relief Claims
- Guide 10: Understanding your Accounts
- Guide 11: British Film Institute (BFI) certification
- Guide 12: Business Expenses
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A key part of the success of any video games business is ensuring it claims all allowable business expenditure. This ensures actual profits are reflected, the correct tax is paid and any reliefs, such as Video Games Tax Relief are maximised. While not exhaustive, the list below is a guide to some of the main costs you are likely to incur. It is recommended that you take professional advice on exactly what you are eligible to claim. This list should be of use whether you are preparing a business plan or working on your company accounts.
- Salaries, Employer National Insurance and Employer Pension contributions.
- Freelance / subcontractor payments.
- Royalties payable.
- The cost of subsistence while away from your workplace.
- Accommodation costs when away from normal place of business.
- Travel and parking costs, mileage allowance if using own vehicle of 45p per mile for the first 10,000 miles, and 25p per mile thereafter. 20p per mile rate for bicycles.
- Training course fees if the skills are relevant to the business.
- Stationary, postage, and printing costs.
- Business insurance, such a professional indemnity insurance.
- Company formation and ongoing costs (e.g. Confirmation Statement fee), although the company formation fee is a ‘capital cost’, and cannot be set off against Corporation Tax.
- Telephone and broadband packages (if the contract is in the company name).
- Mobile and Smartphones (if the contract is in the company name).
- The cost of business calls can be reclaimed on a residential phone bill.
- Home office costs (a flat £6 per week without receipts is allowed by HMRC, or work out a proportion of the household bills).
- Computer equipment and software.
- Costs of advertising and marketing your business.
- Business gifts up to £50 per individual are allowable before more complex rules apply.
- Incidental overnight expenses of £5 per night (£10 per night if overseas) can be claimed as a flat rate if you are working away from home.
- Authorised bank charges, e.g. standing charges each quarter.
- Christmas party exemption for directors and employees of £150 per person (including VAT) per year (you can include your partner or spouse).
- Professional fees, such as accountant or solicitor.
- A limited number of professional subscriptions, if allowed by HMRC.
- Capital allowances (depreciation of assets).
- Business magazines and books.
- An eye test for employees who use computer equipment.
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