Under simplified expenses scheme:
What other Business-proportion expenses can be claimed for working from home in addition to the flat rate of £10, £18 or £26 per month?
To my knowledge, we also can claim the business-proportion of the following expenses:
Telephone & Internet, House rent, Council tax and Mortgage interest.
Am I missing something? Your help is highly appreciated...
Replies (12)
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I agree with you.
Use of the flat rate deduction for household running costs does not prohibit a separate deduction for fixed costs such as council tax (or domestic rates in Northern Ireland), insurance and mortgage interest, where an identifiable proportion can be attributed to business use.
http://taxaid.org.uk/guides/information/a-starting-point-for-the-self-em...
Watch out for pubs, hotels, B&B's etc.
https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
This link is as good as anything. As far as I can work out, flat rate just covers gas, electricity and water.
"The monthly flat rate includes all household running costs, such as heat, light, power, telephone and broadband/internet costs."
https://www.gov.uk/government/publications/revenue-and-customs-brief-14-...
"The flat rate doesn’t include telephone or internet expenses."
https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
So there is a dichotomy of opinion within HMRC.
Take your pick......
I have recently taken the core papers of the ATT qualification and we were taught that the flat rate is to cover the additional running costs of being at home such as heat, light, power, telephone and broadband/internet costs. You can then claim a proportion of fixed costs such as council tax, mortgage interest and insurance on top of that if an identifiable proportion can be attributed to business use (e.g. using office space)
As mentioned above HMRC guidance states in one place it covers telephone and in another it doesn't.
Personally as I have it in black and white it doesn't I am claiming the additional phone/internet costs as well as the 'fixed' expenses; and it makes sense it only covers 'running' costs of heat/light as that is likely to be minimal whereas a telephone could be easily be near on 100% business.
These simplified expenses are useful for those doing a bit of consultancy, etc on the side at home who don't want to go down the road of keeping detailed records.
You're better off avoiding simplified expenses altogether. In fact, you should run a mile from anything they describe as "simplified" as it's usually just a euphemism for moving the goalposts in their favour. Normally, gas and electricity command quite high percentages in a "use of home as office" calculation as you're heating and lighting the home when it would otherwise be empty. Even if it isn't, you can still claim a fair proportion for extra consumption. As for broadband, you can claim say 90% if it is mainly used for business. A bit better than their measly £10 per month!
As for broadband, you can claim say 90% if it is mainly used for business. A bit better than their measly £10 per month!
But broadband isn't included in the £10 a month.
Personally, I'd work it out at least once; if the difference wasn't huge, I'd consider not doing it again. You have to balance the tax benefit against the cost of doing the sums.
I had a client who went to great lengths to demonstrate that his costs were about £150 more than the flat rate. He was gutted when I pointed out that would save him £30 in tax, rather than £150.