Whether you’re a sole trader, running an LLC, or an employee of another company, working from home comes with significant costs. But the good news is that HMRC lets you claim your business bills as allowable expenses.
The money you spend to keep your business up and running is called allowable expense, and you can claim it to reduce your annual tax bills. As leading accounting and tax consultants in London and Walsall, we will walk you through work-from-home tax relief in detail.
Rent and Mortgage
Costs associated with your business premises are tax-deductible. The same applies to your home office. If you pay a mortgage or rent for your home, you can claim a portion of the total cost as an allowable business expense when filing a tax return. For example, you’re working from home in a three-room house, one of which is your office. This means you’re using 33.3% of your home for business. When claiming your expenses, you can claim 33.3% of your rent/mortgage as an allowable expense.
When working from home, your electricity, internet, and other expenses will probably rise. Fortunately, you can claim a percentage of these costs as an allowable business expense. So if your three-room home gets an electricity bill of £500, you can claim up to £166 (£500/3). Similarly, you can claim a part of the heating, internet, phone, and other bills.
Council Tax Bill
Like other allowable expenses, HMRC lets you claim the percentage of your council tax bill used for work.
Most remote workers forget to claim their council tax bills, while others don’t know they can. Since your business is a part of your home and you pay a council tax bill for it, a part of this bill is considered a business expense.
Claim Work from Home Tax Relief with IBISS & CO
Besides the obvious expenses, there can be many other costs involved in your business that can be claimed when filing taxes. A professional tax advisor can go through all your business expenses to identify claimable ones and calculate the accurate percentage. This way, you can reduce your annual taxes and save time and effort.
At IBISS & CO, we help individuals and businesses find legal ways to reduce taxes. our tax specialists can help you successfully claim work-from-home tax relief on all your business expenses. They also offer assistance with self-assessment tax returns, income tax, capital gains tax, corporate tax, and much more. Get in touch with us today to get started.