There's No Workplace
...Like Home
Working From Home
Getting The Balance Right
Working from home is big business. Close to three million UK home-based enterprises are currently pumping £300 billion into the country's economy between them. Working from home is a popular choice for small businesses, and its appeal is pretty obvious on the face of it.
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You get to choose when and where you work, you cut out the drudgery and costs of a daily commute to the office and you can operate a perfectly functional business from the comfort of your personal Secret Volcano Lair, Wi-Fi connectivity permitting.
It's not just freelancers and supervillains doing it, either. From small publishers to professional magicians, creators and innovators are taking their initiative and a stable internet connection and carving themselves out a business. The surge in cloud-based technology has meant that people are working from laptops, tablets - even their smartphones!
If you're considering turning that unused back bedroom into the headquarters of a glorious new empire, there are a couple of things you may want to keep in mind. For example, you can actually claim a proportion of your home's general running costs as business expenses. Basically, they count against your profit calculations and mean you end up paying less tax.
Utility bills, internet fees and even Council Tax payments can be partially claimed in this way, but getting the balance right can be a science in itself so it's worth getting good advice on what proportion can be considered business use.
A few of the more obvious expenses you should keep track of are:
- Home insurance.
- Mortgage interest or rent.
- Repairs and maintenance to your property.
- Telephone and internet charges.
- Utilities and any fuel costs your business incurs.
As always, your best option is to get professional advice - which is what RIFT Accounting is all about.
We'll show you how working from home could be the best decision you ever made.
RIFT Accounting can offer help and advice on all aspects of working from home, to keep the lights on and the lava flowing in your cosy volcano office.
In general, HMRC adopts a surprisingly reasonable attitude toward the costs claimed as expenses by home-based businesses. These enterprises are valuable to the economy as a whole and they're keen to make their set-up and operation as uncluttered as possible.
Don't be shy of recording all your genuine, legitimate costs. Just don't make the mistake of thinking they're going to let you claim a family holiday as a "business lunch" or that screen-accurate Darth Vader costume you've always wanted as a "workplace uniform". You're pretty much demanding that they investigate at that point
A couple of pointers:
- Consider how much of your time you spend at home. A proofreader who spends eight hours a day squinting at a monitor is in a different situation from a gardener who spends all day on someone else's property.
- Think about which parts of your home are primarily used for your business. Have you set up an office with its own computer that only you use, or do you have to wade through half a dozen family members even to get close enough to check your emails?
- Do you run your business from your home, but actually do the work elsewhere? Do your clients visit you at your property, or do you go to them?
All of these considerations will be useful in determining what proportion of your home costs are eligible as business expenses.
