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Reduce Corporation Tax & Claim Expenses

  • 1 day ago
  • 3 min read

Most micro company directors are paying more tax than they need to, not through any fault of their own, but because nobody's ever laid out clearly what's actually claimable. This guide covers the legitimate ways to bring your Corporation Tax bill down and exactly what expenses you're entitled to claim, without the guesswork.


HOW TO REDUCE CORPORATION TAX & WHAT YOU CAN CLAIM: A GUIDE FOR MICRO COMPANIES (2026) How to reduce corporation tax legally? Claim every allowable expense, use capital allowances, contribute to a pension through the company, time purchases around year end, structure salary versus dividends properly.

Ways to reduce corporation tax UK

  • Claim all allowable expenses, not just the obvious ones

  • Use capital allowances when buying equipment

  • Make employer pension contributions through the company

  • Pay a modest director salary rather than none

  • Time significant purchases just before year end

Is pension contribution tax deductible for limited company? Yes, and it's one of the most under-used reliefs we see, reducing Corporation Tax without counting as personal income.

How much can I claim for working from home limited company? Flat rate or a proportion of actual costs, whichever's higher depends on your numbers. We run the comparison for you rather than guessing.

Tax efficient Salary vs dividend split A small salary topped up with dividends is typically most efficient for a single-director company. Salary set at a level that uses your personal allowance and keeps National Insurance low, topped up with dividends for the rest (as it does not attract National Insurance). We can find the optimal split for you by viewing your numbers and matching it with the thresholds and rates. *Payroll needs to be run correctly either way, we handle it well for you, making sure that your salary stays fully compliant.

What expenses can I claim as a limited company? Anything wholly and exclusively for business, office costs, travel, professional fees, software, insurance, home-working costs.

Can I claim travel expenses limited company? Yes, for genuine business travel, mileage claimed at HMRC's approved rate.

What expenses can I claim as self employed? Broadly similar rules, wholly and exclusively for business, but the mechanics differ, as a sole trader deducts expenses directly from their own income rather than through a separate company. Worth discussing with us before deciding which structure suits you.

Can I claim my phone bill as a business expense? Yes, in full if the contract's in the company's name, or the business-use share if it's personal.

What can I claim without a receipt? Very little, as a rule. HMRC expects records for claims, though there are specific exceptions like the flat-rate mileage allowance and the simplified home-working flat rate, which don't require itemised receipts because they use a fixed HMRC rate instead. A claim without evidence is one of the more common triggers for HMRC to ask questions. We keep this organised so nothing gets challenged later.

Director expenses I can claim Mileage, use of home for office use, subscriptions, business subsistence, all claimable if kept separate from personal spending.

How Can Taxation Made Easy Help?

Not confident if you're claiming everything or your payroll and salary structure hasn't been reviewed in a while? We'll go through it and tell you exactly where you could be saving.

  • Payroll, fully compliant and managed

  • Bookkeeping

  • Corporation Tax filing

We are Taxation Made Easy, an online accounting firm registered in England and Wales, serving 500+ businesses across the UK, and proudly awarded Most Ambitious Accounting Firm 2026 & Excellence Award for Corporation & Self-Assessment Tax Returns 2026, London, by SME News. Rated Excellent, 4.8/5.

Want a free review of what you could be claiming or saving? Get in touch and we'll take a look.


 
 
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