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Who would have thought virtual working would have been such a big thing before the covid pandemic? Our way of life has changed significantly and working from home is very much the norm. But did you know that you may be eligible to claim expenses whilst working from home?
Choosing to work from home rather than from an office can be a big money saver for your business. No big overheads such as rent and business rates but it does mean that you may see a big difference in your utility bills, especially with the rise in the cost of living.
So what business expenses can you claim whilst working from home?
It’s important to remember that you can only claim for a proportion of these costs as they are also used for personal use too. However this is what you may be able to claim:
Utility Bills (Gas and Electric)
Wifi/Internet connection/Phone
Council tax
Interest relating to mortgage payments
Rent
By taking the above expenses into consideration, you will save money on your tax bill and we all like not having to pay the taxman as much now don’t we?!
Utilities
In order to calculate these expenses you can either use a flat rate (simplified expenses). This is a set rate in which HMRC will pay depending on the amount of hours you work from home. Alternatively you can calculate by another ‘reasonable’ method such as dividing your gas and electric bill by the amount of rooms within the house and multiplying it by the amount of rooms you use for your business. If you work part time though, you will need to take this into consideration when using this method.
Wifi
You can’t use the flat rate method to calculate this, instead you need to determine what percentage you use the Wifi for business use.
Council Tax
There’s a fine line between having to pay business rates or just council tax. You can find out what category you fall into here.
Rent or mortgage payments
You may be surprised to know that you can claim a proportion of the costs of your rent or mortgage interest. You can’t claim the full amount as this is also for personal use, but you can claim a proportion of the interest on your mortgage or rent payment. An important note is if you use any part of your home solely for business use and then sell your home at a later date you will be liable to pay capital gains tax.
If you have any questions about what you can and can’t claim for through your business then please get in touch.
We also have a guide here to help you..
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