Running a limited company comes with plenty of opportunities to save tax legally and efficiently. Here are some of the easiest and most commonly missed director expenses and exemptions for the 2026/27 tax year.
1) Use of home office
If you work from home and your company does not provide you with an office, your company can pay you £6 per week (£312 per year) tax-free without needing receipts.
This is designed to help cover additional household costs like heating, electricity, and broadband.
You may also be able to claim more if you calculate the actual business use of your home, but the flat-rate method is the simplest option.
2) Mobile phone bill
Your company can pay for one mobile phone per employee/director tax-free if:
- The contract is in the company’s name
- The phone is provided by the company
- It is mainly used for business
Personal calls are allowed, as long as the phone was not provided primarily for personal use.
If the contract is in your personal name and the company reimburses you, this can become taxable.
3) Broadband
Broadband can only usually be claimed tax-free if it is a genuine additional business expense.
What if you already had home broadband?
If your home broadband contract already existed before working from home, HMRC says there is normally no additional cost created by business use.
This means:
- Your company generally cannot reimburse your personal broadband bill tax-free
- Any reimbursement could become taxable and subject to PAYE and National Insurance
This is because the broadband already has a personal purpose.
When broadband can be claimed
Broadband is usually allowable if:
- The contract is in the company name, or
- You did not previously have broadband and installed it specifically for work purposes
In these cases, the company may be able to pay the cost tax-free, provided private use is insignificant.
Best practice
For most directors, the simplest and safest approach is:
- Claim the £6 per week home office allowance, and
- Have any dedicated business broadband contract set up in the company name
That keeps things clean, simple, and low-risk from an HMRC perspective.
4) Trivial benefits
Trivial benefits are a simple way to take small perks from your company tax-free.
To qualify, the benefit must:
- Cost £50 or less including VAT
- Not be cash or a cash voucher
- Not be a reward for work or performance
Examples include:
- Flowers
- Bottles of wine
- Manicures
- Meals out
For directors of close companies (most small limited companies), there is an annual cap of £300 per tax year. Employees do not have this annual cap.
5) Continued professional development (CPD) + training
Your company can pay for training and professional development if it relates to your existing trade or role.
This can include:
- CPD courses
- Webinars
- Seminars
- Industry subscriptions
- Professional training
The training must maintain or improve existing skills. Training for an entirely new trade is usually not allowable.
6) Professional subscriptions
Your company can pay for certain professional memberships and subscriptions tax-free if they are relevant to your work.
Examples may include:
- ACCA
- ICAEW
- CIPD
- Trade bodies
- Industry memberships
The subscription must appear on HMRC’s approved list and relate to your role or trade.
7) Annual Christmas party/ event
Your company can hold an annual staff event, such as a Christmas party, and claim tax relief.
The exemption is:
- Up to £150 per head, including VAT
- Open to all employees
- Must be an annual event
The £150 is not an allowance — it is an exemption. If the cost goes over £150 per head, the entire amount becomes taxable, not just the excess.
8) Mileage claims
Mileage rate update (April 2026)
HMRC increased the approved mileage allowance from 45p to 55p per mile for the first 10,000 business miles from 1 April 2026. Any references to 45p in this article reflected the guidance available at the original publication date.
If you use your personal vehicle for business journeys, your company can reimburse you using HMRC-approved mileage rates.
For cars and vans:
- 45p per mile for the first 10,000 business miles
- 25p per mile after 10,000 miles
This covers fuel, servicing, insurance, and general wear and tear.
You should keep a mileage log showing:
- Date of journey
- Destination
- Reason for travel
- Miles travelled
9) Pension contributions
One of the most tax-efficient ways to extract money from your company is through employer pension contributions.
Your company can contribute directly into your personal pension and usually receive corporation tax relief.
For 2026/27, the annual pension allowance remains £60,000, subject to your earnings, pension history, and tapering rules for higher earners.
Employer pension contributions are:
- Usually free from Income Tax
- Usually free from National Insurance
- A deductible business expense for the company
10) Business meals
You can claim food and drink costs when travelling for business purposes or attending business meetings.
Examples include:
- Client meetings
- Travelling to temporary workplaces
- Overnight business trips
- Conferences
- Training meetings
Normal everyday lunches are not allowable if you are working from your usual place of work.
11) Eye test & glasses
Your company can pay for eye tests for employees who regularly use computer screens.
Glasses or contact lenses can also be exempt if they are specifically required for screen work.
This exemption is linked to health and safety requirements for display screen equipment users.
12) Annual medical check or health screening
Your company can provide:
- One health screening assessment per tax year, or
- One medical check-up per tax year
These can usually be provided tax-free to employees and directors.
Final Thoughts
Many directors miss out on simple tax-saving opportunities because they either:
- Do not know the rules
- Do not keep proper records
- Assume everything becomes taxable
Used correctly, these small exemptions can add up to significant savings over the year while staying fully compliant with HMRC rules.
As always, make sure:
- Expenses are genuinely business-related
- Records and receipts are kept
- Claims are reasonable and properly documented