How claiming expenses can lower your tax bill

Did you know you could be claiming back many of your business expenses? Here’s our guide to claiming expenses and reducing your tax bill as a small business.

At a time where cashflow is tight and the economic outlook is less than rosy, it’s important to look for any possible way of saving money and reducing your tax bill.

Claiming your business expenses is one way to put money back in the kitty

Why claim against your small business expenses?

It doesn’t matter if you're a limited company or sole trader, you have the option to claim your business expenses back annually in your tax return to the Inland Revenue.

Viable operational expenses are deducted from your business earnings over the course of the year, reducing what’s known as your ‘taxable income’. In essence, you reduce the amount of income you must pay tax on, cutting your tax bill and bringing money back into the business.

What expenses can you claim?

Many of your business and operational expenses will be tax deductible

Here’s a breakdown of what you claim:

Vehicle expenses, transport costs and travel for business purposes
Rent paid on business premises
Depreciation on items like computers and office furniture
Interest on borrowing money for the business
Some insurance premiums
Work-related journals and magazines
Membership of professional associations
Home office expenses
Work-related mobile phones and phone bills
Stationery
Work uniforms
Tax agent’s fees.

If you own an investment property, expenses you can claim for include:

Repairs and maintenance (but not renovations that substantially improve the value of the property)
Professional services fees, like accountants, lawyers or property managers
rates and insurance
Mortgage repayment insurance
Vehicle and travel expenses when you travel to inspect your property or do repairs
depreciation on capital expenses, like whiteware, appliances or heat pumps
Legal fees involved in buying a rental property, as long as the expense is $10,000 or less.

How do you make a claim?

To claim an expense, you must have a record of that expense, eg a receipt, or Inland Revenue may not allow the expense to be claimed.

Your business accounts will be submitted at the close of the financial year. These will include all income and expenses you’ve incurred over the year, including records of all your expenses.

To claim against any eligible expenses, you’ll need a copy of a receipt for the purchase. When you file your tax return, you’ll either copy your income and expenses into your financial statements summary (IR10), or send Inland Revenue a summary of your accounts.

It’s good practice to partner with an accountant or bookkeeper, and to use the latest cloud accounting software so you have all the data needed to make your expense claims.

Talk to us about improving your expense management

Claiming back your business expenses is a simple way to cut your taxable income and reduce your overall tax costs – a move that can be a major boost for your cashflow. We can help improve your expense management, setting up the best accounting systems and claiming back all eligible expenses.

< Older Post

Newer Post >

Tax planning helps you do more with your money

8 July 2026

Tax may be boring, but smart use of tax planning is a superb way to help your business do more with your money.

Is your business structure still the right fit?

3 July 2026

Your business structure plays an important role in how your business operates, how profits are taxed, how decisions are made, and how much personal risk you may be exposed to. For many businesses, the structure chosen at the start made sense at the time. But as your business grows or changes, it is worth asking whether that structure still supports where you are now - and where you are heading. The three most common business structures are sole trader, partnership and company. Each has different cost, administration, tax and liability considerations. Operating as a sole trader A sole trader structure is where one person owns and runs the business. The main benefit is simplicity. It is easy to set up, and from a tax perspective, business profits or losses are included in your personal tax return. Being a sole trader also does not prevent you from employing staff if your business grows. However, this structure can carry more personal risk. Sole traders generally have unlimited liability, which means if the business runs into financial or legal trouble, you may be personally liable. This makes the right insurance and risk management especially important. A sole trader structure can also become limiting if you want to bring in other owners, attract investment, or prepare the business for sale. Working within a partnership A partnership is where two or more people go into business together. Partnerships can be a practical way to combine skills, knowledge, resources and capital. They are usually relatively simple to set up and manage, although it is important to have a clear partnership agreement in place. This should document how profits are shared, how decisions are made, and what happens if one partner wants to leave or circumstances change. From a tax perspective, partnership profits are generally not taxed at the partnership level. Instead, each partner includes their share of the profits in their own personal tax return. The main risk is that partnerships do not offer the same legal separation as a company. In many cases, partners may be liable for partnership debts jointly and severally. There are ways to reduce this risk, such as using a limited partnership, but this should be considered carefully with the right professional advice. Operating as a company A company is a separate legal entity from its owners, who are known as shareholders. One of the key advantages of a company structure is limited liability. In many cases, a shareholder’s financial liability is limited to the amount they have invested in the business. A company structure can also be useful if you want to bring in investors, introduce new shareholders, or sell the business in future. However, companies usually come with higher administration and compliance requirements than a sole trader or simple partnership structure. This includes annual accounts, tax returns, Companies Office requirements and other record-keeping obligations. It is also important to remember that company funds belong to the company, not personally to the directors or shareholders. Money is usually taken out through salary, dividends, drawings or director loan accounts, depending on the circumstances. Getting this right is important from both a tax and cashflow perspective. When should you review your structure? It may be worth reviewing your business structure if: your business has grown or become more complex you have taken on staff, debt, assets or higher levels of risk you are considering bringing in another owner or investor you are planning to sell, exit or pass on the business your personal circumstances have changed you are unsure whether your current structure is still tax-effective or appropriate Is your current structure still working for you? There is no one-size-fits-all answer when it comes to business structure. The right option depends on your business, your goals, your risk profile and your future plans. If you are unsure whether your current structure is still the best fit, talk to our team. We can help you understand the pros and cons of each option and work with your legal adviser where needed to make sure your structure supports your business now and into the future.

Getting the balance right with AI: Some dos and don'ts

29 June 2026

We’re experiencing an ‘AI revolution’. But do you know where AI can truly benefit your small business? We cover some key dos and don’ts of using AI in your business.