2 min read
Definition
Allowable expenses are business costs incurred wholly and exclusively for the trade that can be deducted when calculating taxable profit — the opposite of disallowable expenses.
In plain terms
These are the genuine business costs the taxman lets you deduct. The test is whether they were incurred purely for the business — private or dual-purpose spending is often restricted or disallowed.
Why it matters for your company
Capturing every allowable expense reduces your tax bill legitimately, while wrongly claiming disallowable ones invites trouble. Good bookkeeping ensures you claim what you should and no more.
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