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8 Surprising Expenses You Can Claim Working From Home

From over-priced travelcards to morning coffee, working from home can save you a bundle. But did you know you can claim back tax on these expenditures too?

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From over-priced travelcards to morning coffee, working from home can save you a bundle. But did you know you can claim back tax on these expenditures too?

Guides

8 Surprising Expenses You Can Claim Working From Home

From over-priced travelcards to morning coffee, working from home can save you a bundle. But did you know you can claim back tax on these expenditures too?

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Business expenses can be a foggy area, especially if you’re self-employed and the lines between ‘home’ and ‘work’ are starting to blur.

You know you’re entitled to a certain amount of expenses to claim back on your taxes, but how far does it go?

Some expenses are clear-cut (for example, exactly which types of work parties can be claimed back for). However, for those who work from home, you may be surprised how many of your monthly living costs can be added to the HMRC forms come January.

Claiming for something that you don’t use exclusively for work can feel wrong. However, if you use something for your business, even if only on a part-time basis, you can almost definitely claim that expense back. For the most part, it requires working out the proportional time spent using the item or service for work purposes.

Here's a list of some of the expenses which you may have missed:

1. Your internet

Sure, you spend three hours a night using it to browse houses you’ll never buy and see what everyone’s doing on social media. But don’t forget about all the time you’re using it to send a quick email, hunt for contacts online, do admin on the HMRC website, and so on.

Work out proportionately how much time is spent doing business online, and divide your total internet bill accordingly.

A handy website tracking tool like RescueTime or TimeStats (Chrome browser only) could help you measure how much of your time is spent where.

2. Your home office

While we’re on the matter of all things digital, don’t forget about your laptop, your desktop computer, or your printer. If you paid money for these items and ever use them for business (writing out emails, calling to confirm appointments, making copies of documents), you can claim.

A handy thing to know is that you can claim for items bought before you legally registered as self-employed.

These are known as ‘pre-trade expenses’, and the general rule of thumb is that you can claim for anything you bought within the last seven years that would qualify as tax-deductible had you bought them while trading.

So if you registered for trading in 2016 but you bought your computer back in 2014, it should qualify (but always check with HMRC if you’re unsure).

3. Your electricity and gas bill

Remember that you wouldn’t be able to do your job if the lights weren’t on and your house felt arctic.

How do you work out how much of your utilities to charge? It’s not so easy to count your lightbulbs and calculate their energy consumption every day.

As a rough guide, you can firstly figure out how much of your time is spent doing business – to equate how long, each day, your business is benefitting from the usage of electricity and/or gas. Then, you’ll need to look at your house.

If you’re heating your whole house but you only work from one room, you can only claim one room’s worth of utilities. Do a few sums and you’ve saved a little money thanks to your everyday bills.

4. Your phone bill

Of course you need to remember your phone bill, especially if your work involves consulting clients on calls or specialist advisory calls.

The simplest way to expense work calls is by having a separate work phone. However, if you prefer to just own and carry the one phone, make use of your mobile phone’s call log to accurately know how much of your phone bill should be attributed to work calls (this is also a good habit if you need to know billable hours, for clients who pay for your time).

5. Your PR

Do you go to networking evenings? Run events with the purpose of marketing your business? Keep every receipt, tot up every expenditure and note every lunch – it’s all tax deductible.

Don’t blur the line with business entertainment, however. This isn’t covered unless it’s been explicitly stated by HMRC – for example, the annual work Christmas party.

6. Your council tax

That’s right – this counts as a business expenditure if you’re working from home for part of the time, and again should be worked out proportionately.

7. Your house and home

Home is where the heart is. Sometimes, it’s also where the office and the career is (and making that mix work isn’t always easy).

You can claim a proportion of your mortgage interest as a business expense, again calculating how much of the property you use for business purpose

The same thing goes for renters: if you’re renting from a landlord, a proportion of that rent if you can work out what is used solely for business purposes. If you are a landlord operating as a sole trader, you may not be able to do this as you cannot legally rent to yourself.

Some repair and maintenance costs can be expensed – for example, if you renovate your home office. If, however, you’re deciding to re-do your kitchen or add an extension, this kind of thing would not be covered.

8. Your wheels

Do you deliver products, drive to provide a service or just have to nip away from home now and then?

You can use a simplified flat rate to work out what to claim back as expenses for your car, van or motorcycle if you don’t fancy figuring it out (provided you didn’t claim the vehicle as capital allowances). Get more info from gov.uk by clicking here.

Remember, for the final say on all things when it comes to being self-employed and claiming expenses, always check with HMRC or a qualified accountant who specialises in self-employed business accounts.

For more tips, guidance and information for SMEs and start ups, visit www.brighterbusiness.co.uk, brought to you by Opus Energy, one of the fastest growing energy companies in the UK.

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8 Surprising Expenses You Can Claim Working From Home

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