Why March Is the Best Time to Review Business Expenses

There's something about March that makes it the perfect month for a financial spring clean. The tax year is drawing to a close, the new financial year is just around the corner, and those receipts you've been piling up can no longer be ignored.

But reviewing your business expenses in March isn't just about ticking a compliance box. It's a strategic opportunity to identify savings, maximise tax deductions, and set your business up for a more profitable year ahead.

Let's explore why March is the ideal time for this exercise and how to make your expense review work harder for you.

The March Advantage: Why Timing Matters

1. The Tax Year-End Looms

The UK tax year ends on 5th April. Any expense incurred after that date belongs to the next tax year. By reviewing in March, you have a small window to:

• Prepay expenses for the coming year to claim relief in the current year

• Identify missed deductions before it's too late

• Make strategic purchases that benefit your current tax position

2. Fresh Start for the New Year

April brings new tax rates, new allowances, and a clean slate. A March review ensures you enter the new financial year with:

• Clean, organised records

• Clear understanding of your cost base

• No lingering financial clutter from the previous year

3. Time to Act

Unlike a December scramble, March gives you breathing room. You have weeks to gather receipts, chase missing information, and make informed decisions, not days.

Common Business Expenses UK SMEs Miss

Before we dive into the review process, let's look at expenses that often go unclaimed. Could you be missing any of these?

1. Home Office Costs

If you work from home, you can claim a simplified expense of £6 per week without receipts. Alternatively, you can claim a proportion of your actual costs, mortgage interest, utilities, council tax based on the space used for business.

2.Mileage and Travel

Business travel is claimable at 45p per mile for the first 10,000 miles. Many business owners forget to log their journeys or don't claim for trips to meetings, client sites, or networking events.

3.Professional Subscriptions

Membership fees for professional bodies, trade associations, and even some industry publications are allowable expenses if they're relevant to your business.

4.Training and Development

Courses, workshops, books, and conferences that keep your skills current for your business are tax deductible.

5.Bad Debts

If a customer has defaulted and you've taken reasonable steps to recover the debt, you can claim it as an expense. This is frequently overlooked.

6.Business Gifts

Gifts to customers costing less than £50 per person per year (and not food, drink, or tobacco) are deductible.

7.Technology and Software

Laptops, phones, software subscriptions, and cloud services used for business are all claimable. Even a proportion of your home broadband and mobile bill can be included.

8.Small Tools and Equipment

Items costing less than £200 can often be claimed as an expense rather than capitalised. Check with your accountant.

Your March Expense Review Checklist

Set aside an hour this week to work through this checklist. Your future self and your bank balance will thank you.

Step 1: Gather Everything

Collect all business receipts, bank statements, and credit card statements from the past 12 months. If you're using bookkeeping tools like Xero or QuickBooks, this step is already done for you, everything is in one place.

Step 2: Review Each Transaction

Go through every expense. For each one, ask:

• Is this genuinely for business?

• Is it categorised correctly?

• Have I claimed it already?

• Is there a receipt or evidence to support it?

Step 3: Check for Recurring Costs

Subscriptions and regular payments are where money often leaks. Review:

• Software subscriptions: Are you using them all?

• Insurance policies: Can you get a better rate?

• Utilities and phone: Are you on the best tariff?

• Banking fees: Could you switch to a cheaper account?

Step 4: Consider Timing

If you're planning major purchases for the coming months, ask your accountant whether buying before 5th April makes sense. Sometimes accelerating an expense into the current tax year can reduce your tax bill.

Step 5: Document Everything

Ensure every expense has supporting evidence. For HMRC, that means:

• Receipts showing supplier, date, amount, and what was purchased

• Bank or credit card statements showing the payment

• A clear link to your business activity
  
  
  

The Technology Advantage

If reviewing expenses feels overwhelming, you're not alone. But modern accounting software UK SMEs use has transformed this process.

With cloud accounting, you can:

• Capture receipts instantly: Snap a photo with your phone, and the software extracts the details.

• See expenses in real-time: No more end of year hunting.

• Categorise automatically: The software learns your patterns and suggests categories.

• Run reports instantly: See your total expenses by category with a few clicks.

If you're still using spreadsheets or shoeboxes, March is the perfect time to upgrade. You'll save hours of admin time and ensure nothing is missed.

What to Do After Your Review

Once you've completed your expense review:

• Update Your Records: Ensure all expenses are logged and categorised correctly in your accounting system.

• Share with Your Accountant: If you work with an accountant, provide them with a summary of any significant expenses or changes.

• Adjust Your Budget: Use your expense insights to set realistic cost targets for the coming year.

• Set Up Systems for Next Year: Implement processes to make next year's review easier, whether that's a weekly receipt scanning habit or a dedicated business account.

• Claim Your Deductions: Ensure all allowable expenses are included in your tax return calculations.
  

The Bottom Line

A thorough expense review isn't about claiming what you're not entitled to, it's about claiming what you are entitled to, and ensuring your business isn't paying more tax than necessary.

In March, you have the perfect window to get this done. The tax year is ending, the new year is beginning, and the time you invest now will pay dividends in lower tax bills, better financial clarity, and a stronger foundation for the months ahead.

Upgrade your bookkeeping systems.

Book a free expense review consultation today