Expenses disallowed when calculating trading profits for Corporation tax

EXPENSES MUST BE WHOLLY AND NECESSARILY INCURRED FOR TRADE PURPOSES TO BE TAX-DEDUCTIBLE

• Any depreciation on fixed assets such as vehicles, buildings, equipment etc.
• Dividends paid to shareholders
• Improvements to capital assets such as buildings (however repairs are allowable)
• Entertaining customers (entertaining employees is allowed)
• Gifts to customers are disallowed unless
• • they cost less than £50
  • the gift is not food, drink or tobacco
  • the gift carries an advertisement for the business
• Donations to national charities not made via GiftAid.(Corporate GiftAid is given gross and is an allowable expense.)
• Donations to political parties
• Legal fees relating to capital items owned by the business (except for fees incurred obtaining loan finance, obtaining patents or registering trademarks)
• Legal fees relating to issue of share capital
• Interest payable relating to non-trading activities can only be relieved against interest income (this includes interest payable to HMRC)
• Interest payable relating to loans used to buy rental properties can only be relieved against interest income, not against property income.
• Premiums paid for grants of leases.
• Fines and penalties (except for reimbursement of those incurred by an employee while on duty)