One of the most effective ways to optimise your financial health is to take full advantage of tax-deductible expenses. These deductions can significantly reduce your taxable income, thereby lowering your overall tax bill.
We know that determining what qualifies as a “deductible expense” can be tricky. That’s why we’ve outlined what Revenue considers a legitimate expense, common examples of tax-deductible expenses in Ireland, and how to claim a deduction for expenses incurred.
So, if you run a business in Ireland and want to save money and reduce your tax liability, you’ve come to the right place!
What are tax-deductible expenses in Ireland?
Tax-deductible expenses are costs that can be deducted (hence the name) from your income to reduce the amount of tax you owe.
You need to make sure that any and all tax-deductible expenses you claim are used for business purposes, and not for personal use.
It’s also worth noting that in order to claim these deductions, you must keep accurate and up-to-date documentation (such as receipts).
What about expenses that are used in both a business and personal capacity?
When you spend money on something that serves both business and personal purposes, you can claim a deduction for part of the expense.
For example: if you use your mobile phone for work and for home, you can claim a deduction for the business portion of your phone bill. Let’s say 60% of your phone usage is for business, you can therefore deduct 60% of the total phone bill as a business expense.
Common examples of tax-deductible expenses in Ireland
- Travel and subsistence: costs related to business travel such as transport fares, accommodation, and meals, are deductible. This means if you travel for work, you can claim back these expenses.
- Employees’ salaries: wages and salaries paid to your employees can be deducted. This includes regular pay, bonuses, and pensions.
- Rent and office maintenance: money spent on renting your office space and maintaining it, like cleaning or repairs, is deductible. Utilities such as electricity, water, and heating for your office are also included.
- Office equipment: costs for purchasing office supplies and equipment, such as computers, cabinets, and desks, can be claimed as expenses.
- Marketing and PR: expenses for promoting your business, like advertising, marketing campaigns, and PR activities, are also deductible.
- Training and education: costs for courses, workshops, or seminars that improve your business skills or those of your employees are deductible.
- Professional fees: fees paid to accountants, solicitors, or consultants for business-related services are also eligible.
- Phone bills: costs for business-related phone calls and mobile plans are deductible. As mentioned above, you need to make sure that the expense is solely for business purposes (or appropriately apportioned if used for both personal and business needs).
How to claim expenses through Revenue
To claim tax-deductible expenses in Ireland you need to follow these steps:
- Log in to Revenue Online Service: access the Revenue Online Service (ROS) using your login details.
- Select the form: choose the relevant form for your business—Form 11 for self-assessed individuals or Form CT1 for companies.
- Enter your expenses: fill in the sections related to expenses on the form. You’ll need to provide details and amounts for each expense you’re claiming.
- Submit the form: review your entries and submit the form online.
Remember to keep all your records and receipts in case Revenue requests them later.
Keep track of all your tax-deductible expenses in Ireland
Stay on top of your spend and keep all your tax-deductible expenses in one place; including your cumulative mileage rates and ERR governed by Revenue.
Never miss a deduction and reduce your tax liability with Capture Expense. Book a demo today to see how we can help.