by Asim Abbas
11 November 2026 
Director expenses: what your limited company can pay for
Director expenses: what your limited company can pay for
As a company director, you can have the company pay for many business costs, reducing Corporation Tax. But some costs create a taxable benefit for you instead.
- Costs must be wholly and exclusively for business
- Mileage at 45p a mile for the first 10,000 miles
- Some costs create a benefit in kind
- Keep receipts and records for everything
The rule is that expenses must be wholly, exclusively and necessarily incurred for your role, and the company must pay or reimburse them properly.
This guide covers the most common director expenses and how they’re treated in 2026/27.
Common director expenses
| Expense | Treatment |
|---|---|
| Business mileage in your own car | 45p a mile for first 10,000, then 25p, tax-free |
| Business travel and hotels | Allowable |
| Subsistence on business trips | Allowable, within reason |
| Mobile phone contract in company name | Tax-free, one phone |
| Professional subscriptions | Allowable if on HMRC’s list |
| Training for your current role | Allowable |
| Home office allowance | £6 a week tax-free, or actual extra costs |
| Annual health check or eye test | Tax-free in some cases |
| Employer pension contributions | Usually deductible and tax-free |
Working from home
Although employees can no longer claim working from home relief from HMRC themselves from April 2026, your company can still pay you £6 a week tax-free, or reimburse actual additional costs, if you’re required to work from home. Some directors rent part of their home to the company, but this needs care and creates rental income.
Mileage tax calculator
Work out your mileage claim.
Neil, a consultant director, drives 8,000 business miles a year in his own car. His company pays him 45p a mile, £3,600, tax-free. That saves the company Corporation Tax of £684 at 19%, and Neil receives the £3,600 without any personal tax. Taking the same amount as dividends would cost him personal tax.
Expenses that are taxable benefits
- Private medical insurance
- Company cars and private fuel
- Gym membership
- Personal bills paid by the company
- Home broadband if not a business contract and used privately
These are usually deductible for the company but taxable for you, and the company pays 15% Class 1A NI.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Not allowed at all
- Client entertaining, not deductible for Corporation Tax
- Ordinary commuting to a permanent workplace
- Everyday clothes
- Fines and penalties
Records and reimbursement
Keep receipts and mileage logs. Claim expenses through an expense claim, and avoid paying personal costs from the company account. If you do, it goes on your director’s loan account. See our director’s loan guide.
See HMRC’s guidance on expenses and benefits A to Z, our trivial benefits guide and our limited company accountants.
What should I do next?
Every business trip.
Expense claims, not company card.
They’re taxable for you.
Frequently Asked Questions
Can my company pay my mileage?
Yes, 45p a mile for the first 10,000 business miles and 25p after, tax-free.
Can my company pay for my phone?
One mobile phone on a company contract is tax-free.
Can I claim working from home as a director?
Your company can pay £6 a week tax-free if you’re required to work from home.
Is client entertaining deductible?
No. It isn’t deductible for Corporation Tax.
What if the company pays a personal cost?
It goes on your director’s loan account or is treated as income.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Stephen Reynold
I’m Stephen Reynold, an accountant at Wingate Accountants. I work with sole traders and small companies, turning tax rules into clear, practical next steps.
