lighting or heating) and for how long each day the service is used for solely business reasons (for example, the business area only needs to have heating for 50% of the day). In order to establish the proportion of household costs used by the business, you will need to work out the percentage of your property which is used for business purposes, what proportion of a utility bill that can be apportioned to business use (e.g. You are able to claim for the extra costs of lighting and heating the workplace, for example, as well as business phone calls and a dedicated business broadband service. They should not be for services already being provided for personal use, or those that have a clear dual purpose (such as a broadband line shared by the household as well as the business). What can I claim for utilities and telephones?Īs an alternative to the £4/week fixed rate expense, you can also get tax relief for a limited number of other expenses.
#Limited company contractor expenses full
On the downside it’s not a huge amount towards household expenses which could be substantial if you are working full time from a home office. The benefits for claiming flat rate expenses are that no receipts are needed and as it’s a prescribed HMRC rate there is very little chance of challenge. HMRC doesn’t treat this as a benefit in kind which means you won’t have any additional tax to pay. This can be included as an allowable expense alongside anything else you are claiming. You do not need receipts to prove your expenses and you can claim £4 per week, which is an allowance of £208 for the year. The easiest way to calculate your home office expenses is to use HMRC’s published allowance for the additional costs of running your business from home.
If you’re a limited company, then there are three ways of working out your home office expenses – using HMRC’s flat rate amount, taking a proportion of allowable utility bills or creating a rental agreement between you and your limited company. One of our most frequently asked questions by directors is what expenses can you legitimately claim back against your company? Many small companies, especially during the startup phase, perform a lot of work from home.
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