When you run a care business the most important part is the care and support you give to others. Closely followed behind this is having healthy finances in the background, keeping everything ticking over, to ensure you’re providing the best care possible to those who need it.

One important thing to know is what expenses you can and can’t claim through your business. Making sure you’re claiming every tax deduction you’re entitled to… and avoiding the ones you’re not! Here’s a straightforward guide to what care businesses can and can’t claim, based on HMRC’s latest guidance.

What You Can Claim

1. Staff Costs

• Wages, salaries, National Insurance, and pension contributions for carers and admin staff.
• Agency fees for temporary care workers.

2. Training and Professional Development

• Costs for staff training, essential certifications, and relevant courses.

3. Premises Expenses

• Rent, utilities, council tax, and business rates for your office or care facility.
• Cleaning, repairs, and maintenance costs.

4. Equipment & Supplies

• Medical supplies, PPE, and care-related consumables.
• Office supplies (stationery, computers, software).

5. Travel and Mileage

• Business mileage for home visits (make sure to keep accurate logs).
• Public transport costs for staff travelling between clients.

6. Insurance

• Professional indemnity, public liability, and employer’s liability insurance.

7. Marketing and Advertising

• Website costs, local advertising, and printed materials.

8. Professional Services

Whether that be a bookkeeper or an accountant who is keeping your finances in order or a solicitor who is giving you legal advice. All professional services that are related to the business are tax deductible.

What You Can’t Claim

1. Personal Expenses

• Anything not strictly for business use (e.g., personal mobile phone bills, family meals).

2. Fines and Penalties

• Parking fines or HMRC penalties are never allowable.

3. Client Entertainment

• HMRC doesn’t allow deductions for entertaining clients, even if it’s part of building relationships.

4. Capital Improvements

• Major renovations or buying property. These are capital expenses, not day-to-day running costs (though you may be able to claim capital allowances separately).

5. Private Use Portion

• If you use something for both business and personal (like a car or home office), you can only claim the business proportion.



Key Tips for Care Businesses

• Keep Good Records: HMRC loves paperwork! Keep receipts, invoices, and mileage logs. (These should all be stored digitally as per the rules of Making Tax Digital)
• Separate Personal and Business: Have a dedicated business bank account to make tracking easier - plus, unless you’re a sole trader, it’s the law!
• Check for Changes: Tax rules change, so ensure that you review HMRC guidance each year or ask your bookkeeper.

Claiming the right expenses can make a real difference to your care business’s bottom line, but getting it wrong can lead to trouble with HMRC. If you’re ever unsure, reach out to your bookkeeper for tailored advice.

At Bluebells Bookkeeping, we specialise in working in the care industry, so we know the rules and regulations of what’s involved and how your business works. If you need some support, we’d love to have a chat.