Home workers claim from Taxman
Broadband, the internet and mobile devices such as BlackBerrys and personal digital assistants have made working from home much easier.
If you run a business from home, there are tax reliefs available. Chas Roy–Chowdhury, head of taxation at ACCA, says:
“If you have to work from home, HM Revenue & Customs’ has a website that explains the benefits which are payable for home workers — tax relief is available for the extra household expenses that have to be paid if working from home. Typically these extra expenses include:
- the extra cost of gas and electricity to heat and light your work area
- business telephone calls
- use of car — a percentage of tax relief is available based upon how much business use is incurred. In addition a percentage of the 20% capital allowances may also available on your vehicle based upon the percentage of business use.
- You may also be entitled to a deduction for items used for your business — either a capital allowance deduction for computer equipment or a straight forward deduction for some items such as stationary and paper.
Also, there are other tax reliefs available for those who are an employee of a company, but have to work from home:
- A flat rate deduction of £3.00 per week (from 2008–09) for each week that worked at home. This doesn’t include the cost of business telephone calls.
- A larger amount if extra expenses are higher than £3.00 – but the taxman will have to see how these figures have been calculated.
Chas Roy–Chowdhury, head of taxation at ACCA, says:
“HMRC makes it very clear that you will not be able to receive tax relief on domestic expenses that are being paid, such as mortgage payments. And no reliefs are available when it comes to using services such as phones and internet which are also used for personal usage. There has to be a clear demarcation. It is important to claim all tax reliefs if you are running a business from your home, or if you are working as an employee at home; however small the relief payments may be, it is still important to claim them. That old adage of looking after the pennies and the pounds will look after themselves is certainly relevant in this case.”