Limited company owners who work from home on a full-time or part-time basis can claim against allowable expenses, which will help reduce corporation tax bill and increase take home income. When calculating the allowable costs that could be claimed for your limited Company, it is vital to remember that all the expenses made must solely be used for business purposes.
Expenses that can be claimed:
· You can claim tax relief for expenses such as heating, electricity, and internet bills, as well as equipment such as a computer or desk. You cannot claim for expenses that you would have incurred anyway, such as mortgage interest, rent, or council tax.
· Flat rate method: If you have incurred additional expenses due to working from home, you can claim tax relief using the flat rate method. This allows you to claim a fixed amount of £6 per week (or £26 per month) without providing any evidence of the actual expenses you have incurred. This method is the easiest and quickest way to claim tax relief for working from home expenses.
· Actual expenses method: Alternatively, you can claim tax relief for the actual expenses you have incurred by working from home. This method requires you to keep records of your expenses, such as bills and receipts. You can then claim tax relief for the proportion of your total expenses that relate to your work.
· How to claim: You will need to submit a claim through your tax return.
It is important to note that you can only claim tax relief for working from home expenses that are directly related to your work, and that you must have actually incurred the expenses in order to claim relief. If you have any doubts or questions about claiming working from home expenses, it is recommended to consult with a qualified tax professional.
If you need advice so you can focus on running your business, we are here to help. Either drop us a message through our contact form, call 01172565052, or email us on info@taks.org.uk
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