As the title says are expenses needed. I have a limited company and am the director, I understand after reading on here allowable expeneses lower the overall profit which in turn reduces your overall corporation tax bill.
My question is should i expense items for the business if i dont really too as my understanding is im just taking money out of the business. For example say my overall profit was £50,000, corporation tax at 19% = £9500. Now if i bought an item for the business which i could in actual fact do without but is a allowable expense, say a laptop as an example for £1000, this would reduce my corporation tax to £9310 (50,000-1000) x 19%). So i saved £190 on tax but spent £1000 when i didnt need to.
The way i understand it is if i dont have to expense anything i shouldnt as i end up taking more money out of the business and saving less on tax. Can anyone help me with understanding if this is the right way of looking at this please.
Thank you in advance.