If you’re self-employed and working from home, you’re likely extremely aware of self-assessment tax returns. Many self-employed individuals feel that they do not fully understand the extent of the claims that they can make for their business – claims that are taken off their overall taxable amount and could mean that they pay less tax in that given year.
A list of the things your self-employed business can claim is available online, but it’s extensive and can be confusing. Some things cannot be claimed on, and if a tax return does include these, then it can delay the return. Which of course means that you would need to edit your return and send it back in.
Your Home Office – Costs of Your Business Premises
You can include the rent, electric, gas, and water for the room you use as your home office. To calculate these, you take the number of rooms in your home (minus any bathrooms), and divide the amount spent by that number. For example, if you paid £40 on electric a month, and you have four rooms (minus your bathroom), then £10 a month can be labelled as a business expense for your office electricity. You can also include property insurance and security in the amount that you claim.
Equipment and Phone/Internet Services – Office Costs
Costs of equipment and stationery come under office costs, and so do phone services. If you use your mobile for your business, then however much you top it up per month or the costs of your contract can be claimed. Your internet services should also be included here. Stationery and equipment cover everything from computer software to printing and postage.
Travel Costs
Though you work from home, you may still have business meetings or need to use taxis, trains, or buses to complete some of your business ventures. If you have your own car, you can claim a certain amount per mile on business travel needs.
Parking costs, hiring charges, license fees, and breakdown cover all come under this category, as well. In some cases, you can claim a vehicle you purchase as a capital allowance expense, but you can only do this if you’re using cash basis accounting and not simplified expenses. Things are a little more complicated, but worth it if you need a car or van for your business. You can also claim on hotel rooms and meals on business trips that are overnight.
Uniforms and Clothing
You can claim allowable business expenses for any protective clothing you need to complete your work, any uniforms you need, and for costumes (if they are needed for your line of work). You cannot claim for everyday clothing, even if the clothes you wear while working are just normal everyday clothes.
Staff Claims
Finally, you can also claim staff expenses. This covers their pay, bonuses, pensions, benefits, and even your employer’s National Insurance payments. Agency fees and subcontractors are covered in this section, as well.
At Cove Accountancy Services, we are always on hand to help you work out if you can claim an expense or not. A lot of our clients work from home offices, so we are very well versed in what sort of expense a home-worker can claim, and which they can’t. If you would like to find out more about the allowances you are entitled to by working from home, we would love to help. Just get in touch with us today and book your free consultation.