Not every cost fits neatly into headings such as rent or wages. Some payments arise unexpectedly and do not justify their own category. These are Sundry Expenses. Although each cost may seem minor, they can build up over the course of a year. Therefore, you must record them correctly to keep your accounts accurate and tax position clear.
What are Sundry Expenses?
Sundry Expenses are small and irregular business costs that do not fit into standard expense categories. Many people also call them miscellaneous expenses. Simply, they act as a practical “catch-all” for minor one-off spending.
These costs usually share the same three features:
- They occur rarely or without warning
- They involve relatively small amounts of money
- They do not belong in an existing expense category
For example: You might buy flowers for an employee’s leaving party or make a small donation to charity.
Each item stands alone. Nevertheless, when you group them together, they form part of your total Sundry Expenses for the period.
Sundry Expenses in Accounting
Accountants tend not to create a new category for every cost, as this would clutter your Profit and Loss Account. It would also make financial reports harder to read and interpret.
Instead, a Sundry Expense category keeps reports tidy and organised. It allows you to record every legitimate business cost withing creating dozens of single-use headings. As a result, your accounts remain clear and easy to understand.
However, you should monitor this category regularly. If the same type of cost appears several times a year, you should create a separate expense heading. At this point, the cost no longer qualifies as sundry because it has become recurring.
Where Sundry Expenses Appear in the Accounts
You will normally find Sundry Expenses within the operating or administrative expenses section of the Profit and Loss Account. They appear as a single combined figure rather than as individual line items. This keeps statements concise and professional. At the same time, your internal records should still show each transaction separately.
Sundry vs General Expenses
You may sometimes struggle to decide where to place a cost. However, understanding the difference between Sundry and General Expenses make classification much easier.
| Sundry | General |
|---|---|
| One-off or sporadic | Regular or recurring |
| Low in value | Often higher in value |
| Difficult to categorise elsewhere | Easy to classify |
| Not part of normal day-to-day trading | Essential to routine operations |
For example: Weekly fuel costs for company vehicles count as General Expenses. On the other hand, a single overseas bank charge would usually count as a Sundry Expense.
Context also plays an important role. A costume purchased for a one-off marketing event may appear random at first glance. However, if you run frequent promotional events, you may classify that cost under “Marketing” instead. Therefore, you should always consider both the purpose and frequency of the expense.
Sundry Income
Sundry does not only apply to spending. You may also receive Sundry Income during the year. Sundry Income is small and irregular amounts that do not relate to your main trading activity. Some businesses also record minor compensation payments or small asset sales as Sundry Income.
For example: You might charge a late payment fee. Alternatively, you may receive a one-off grant from a local council.
You should record Sundry Income separately from core sales. Doing so keeps your main trading performance clear and reliable. It also prevents distortion of turnover figures.
How to Record Sundry Expenses
You should record each Sundry Expense as soon as it arises. These expenses reduce your net profit, which can reduce the amount of tax you pay. You might even discover that certain minor costs appear more frequently than expected.
Just follow these steps:
- Keep the receipt or invoice as evidence
- Post the cost to a dedicated Sundry Expense Account in your ledger
- Credit the bank or cash account used to make the payment
- Add a short description explaining the business reason
- Review the account regularly for repeated items
Most accounting software includes a “miscellaneous” or “sundry” expense option. This feature allows you to log small costs quickly and accurately. Additionally, digital receipt storage reduces the risk of lost paperwork and strengthens your audit trail.
At year end, your accounts will show Sundry Expenses as a single line within operating or administrative expenses. This presentation keeps your Profit and Loss Statement clear while still capturing every legitimate cost.
How Sundry Expenses Affect Tax
Businesses pay tax on profit rather than turnover. Therefore, allowable Sundry Expenses may reduce taxable profit.
- Limited companies include them in the Company Tax Return when calculating Corporation Tax
- Sole traders include them in their Self Assessment tax return
Additionally, VAT-registered businesses can usually reclaim VAT on allowable Sundry Expenses, provided they hold valid VAT receipts. Without the proper evidence, you may lose the right to reclaim VAT.
However, you must ensure that each expense is “Wholly and Exclusively” for business purposes. Personal costs do not qualify. If a payment has both personal and business elements, you should separate the amounts and claim only the business portion.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.