Work from Home Expenses That You May Claim
While many entrepreneurs decide to build commercial offices or rent one out to run their businesses, just as many are choosing to make a living from home. If you are one of those self-employed individuals in the UK conducting business from a work-from-home setup, here is something you may not have realized yet: you can claim the cost of running your at-home company! This will help you save a lot of money in the long run, no matter how small or big your business is.
With that in mind, here are a few expenses you can claim from your at-home company:
1. Council Tax
Depending on how much you use your home for business purposes, you might be able to claim a portion of your council tax costs. If your place of residence is primarily used for business, however, you might have to pay business rates instead.
Typically, you cannot claim rent expenses because you are the business. However, if you are renting your home from a landlord, you can claim a portion of that rent. Note that you will need to have a specific part of your home used for business purposes (for example, a home office) and be working from home regularly.
If you use water for general reasons like drinking, showering, and such, you cannot claim the cost of using water. On the other hand, if your business requires water to run, such as a car detailing service, then you can claim water costs. You will have to work with the water company to figure out a way to separately charge water costs so that you can properly claim this cost.
Whether for home or personal use, you are going to use energy. This can come in the form of electricity, gas, and the likes to ensure your home is powered and comfortable to be in. That said, for business purposes, you can claim a portion of your energy costs depending on how much it is directed towards your business.
Repair costs for damages in your home can be claimed, given that it has affected the rooms you used for business purposes. For instance, you may have experienced some ceiling damages in your home office that needs repairing. However, if the damage has occurred elsewhere that no business is done, such as the kitchen, you cannot claim any part of that repair.
The Internet and other things like mobile data can be claimed if used for business purposes. In fact, you can claim the whole cost of your business use of the line! Again, understand that you can only claim specifically how much is used on the company. Anything allocated to be for personal use cannot be claimed.
If you are in the process of buying a home through a mortgage, then you can claim a portion of its interest if the home is also used for business. As for the regular repayments you make, you cannot claim from those.
These are all the things you can claim, given you use your home for business purposes. Remember that you cannot claim the full cost of these expenses but rather only a portion used for business use. For that reason, it pays to learn the calculation methods to identify the cost or work with an expert such as an accountant to do the calculations for you. This way, you can maximize your claims and save plenty of money in the long run.
1to1 Accountants is an accountancy firm in the UK, offering services to freelancers and small businesses. Schedule a free consultation with us today and find the right accountancy services to support your home business!