One of the most frequent questions we are asked is: “What expenses am I actually entitled to claim?”

Understanding which expenses are allowable can make a real difference to cash flow and tax efficiency, while also ensuring compliance with Irish tax rules.

This guide addresses some of the most frequent expense related queries we receive, including business equipment and vehicles and explains why getting the right advice matters.

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Why Understanding Allowable Expenses Matters

Allowable expenses are costs incurred wholly and exclusively for business purposes.

Claiming the correct expenses can help to:

• Reduce tax liabilities in a compliant way
• Avoid under claiming legitimate business costs
• Support accurate financial reporting
• Reduce the risk of issues or queries from the Revenue Commissioners

Good record keeping is essential, and supporting documentation such as invoices and receipts should always be retained.

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Common Business Expenses That May Be Allowable

Many everyday business costs may qualify as allowable expenses, provided they relate directly to business activity.

Common examples include:

• Office rent, utilities, and insurance
• Professional fees (accountancy, legal, consultancy)
• Software subscriptions and IT services
• Marketing and advertising costs
• Training and continuing professional development
• Phone and broadband costs (business portion only)
• Business travel and mileage (business journeys only, in line with Revenue rules)

Where there is both business and personal use, only the business related element may be claimed for example, phone and broadband costs, business travel, and mileage.

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Business Equipment and Capital Items

Business owners often ask what equipment they can claim tax relief on, particularly when making larger purchases.

It is important to distinguish between:

• Day-to-day expenses such as small tools and consumables, which are typically deducted as part of normal running costs, and
• Capital items such as laptops, machinery, or specialist equipment, which are generally used over a longer period.

Capital items are not usually deducted as an immediate expense. Instead, tax relief is typically claimed through capital allowances, which spread the relief over a number of years, in line with Revenue rules.

The way equipment is classified and when it is purchased can impact cash flow and tax outcomes. For this reason, it is advisable to seek guidance before making significant investments, particularly where timing or eligibility for reliefs may be a factor.

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Vehicles and VAT: What to Be Aware Of

Purchasing a vehicle for business use frequently raises VAT and tax questions.

VAT on motor vehicles is treated differently from most other business purchases under Revenue guidance.

• In general, VAT cannot be reclaimed on the purchase of most passenger cars, even where the vehicle is used for business purposes.
• Commercial vehicles such as vans, lorries, or certain specially configured pick-ups will usually qualify for full VAT recovery, provided they are used for taxable business activities.

The correct VAT treatment depends on factors such as:

• The type of vehicle
• How the vehicle is used
• The nature of the business activity

Because the rules are detailed and documentation is critical, it is advisable to check the position and seek advice before purchasing a vehicle and to maintain appropriate records.

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Why Getting Advice Makes a Difference

Tax rules evolve, and what is allowable in one situation may not be in another. Seeking advice can help ensure:

• Expenses are claimed correctly and supported by records
• Opportunities are not missed
• Compliance is maintained
• Costly errors are avoided

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Asking questions early often prevents issues later.

Understanding what expenses can be claimed and how they should be treated is an important part of managing a business efficiently.

If you have questions about allowable expenses or would like guidance specific to your circumstances, the team at McEvoy Craig would be happy to help.

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