What can I claim as sole trader working from home?

asoe209

Good morning all, just following on from a previous post, think I have now got my head around Tax.

So the next thing I need to get cleared up is what can and can not be claim back on self assessment. I have just registered this week as a sole trader and if im right this is going to need to be completed soon.

The type of business is selling products online. So all of the work done for this is done from home in the evening and weekend as I still work a full time job.

So I just need to be sure what I can claim back and how to work it out.

I read that You can get a % for electric, gas and council tax. As well as Phone/internet and car mileage.

I live in a 2 bedroom flat, I work in the living room say about a quarter to one third of the total room space.

In a second room is where all my stock is held as well as printer at this time it takes up about quarter of the room space but will grow as time goes on.

From what I read there are different ways of working out how to claim back on that. And I’m not sure if storage in another room counts as a claim.

Then there is electric etc, I would say right now im spending about 3 hours and evening give or take and around 6 hours on a weekend working.

So does any one have any idea what or how I go about working this out? Or if there is any thing to claim?

Pennywise

Surprisingly, some good information on the HMRC website.

Firstly, general principles:-

http://www.hmrc.gov.uk/manuals/bimmanual/BIM47820.htm

Then some specific examples:-

http://www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm

asoe209

Yeah I have read that page thank you for the links, But how do you go about working out an estimate on some thing like that?

googler

If you've just started trading, any tax due for the current tax year 2012-13 won't become due until around Dec 2013, surely?

EDIT 31 Oct for paper return, 31 Jan 2014 for online

Calculate it, by all means, but it's not payable on 6/4/13 ....

Do you need to let your home insurers know that you're running the business and storing products at home?

googler

asoe209 wrote: »

Yeah I have read that page thank you for the links, But how do you go about working out an estimate on some thing like that?

Something like what? An estimate of your electricity, phone, heating, or something else?

For example, work out your gas bill per week. If you use gas for heating and cooking, deduct a small amount for the cooking.

If you use one room, what proportion is that workspace compared to the whole heated area of the house? If it's one fifth, multiply the gas per week by 0.2.

How long do you spend there? If you're heating it 24/7, that's 168 hours per week. If you're working there 2 hrs per night for 7 days, that's 14 hours, so take the running figure for the gas and multiply by 14/168.

etc etc

lovinituk

I was under the impression that you can only claim a proportion of bills if a room is used solely for business and nothing else at all. The fact that your rooms are also used for personal use I don't think you claim.

Phone calls need to proved using an itemised and highlighting which ones were for business use.

Mileage can be claimed at the prevailing rate but you should keep a mileage log/diary as proof.

amiehall

That isn't the case. If you look at the examples on the hmrc website, there are specific examples about people using 1 room 4 hours a day for business and 4 hours a day for personal use and how to work that out. You do not need to set aside a specific area for "business use" to claim relief.

asoe209

I was under the impression the the assessment needs to be done as soon as and then the payments made some point after that.

I just had my gas statement come through for the last year which was £255 off head but we pay gas and electric on key and card.

from hmrc examples it is possible to put claims in even if the space is used with other things.

just the working out of the space is going about my head and the working out of whats used during working time.

when it comes to recording mileage alot of the time this will be for going post office or collecting good. so would i just put the mileage for home to post office or from home to post office and back home?

sorry about this guys.....

googler

asoe209 wrote: »

I was under the impression the the assessment needs to be done as soon as and then the payments made some point after that.

G- Assessment of what? You assess your tax affairs for a tax year, April to April. Since it's unreasonable to expect to account for a tax year on exactly 6 April, there's a few months delay before returns have to be submitted

I just had my gas statement come through for the last year which was £255 off head but we pay gas and electric on key and card.

G - makes no difference how you pay it, you just need the figure

just the working out of the space is going about my head and the working out of whats used during working time.

when it comes to recording mileage alot of the time this will be for going post office or collecting good. so would i just put the mileage for home to post office or from home to post office and back home

The whole journey mileage, if the sole purpose of the journey was for the business.

trailingspouse

And of course your insurers know that you keep stock on the premises, and they're perfectly happy with that?? And if the flat is rented, your landlord is also fully aware, and completely tickety boo with the situation??

It never ceases to amaze me how people worry about trifling amounts like mileage and don't notice that they're voiding their insurance policy and risk losing £1000's. And possibly breaking the terms of their tenancy and risking all that entails. I hope that's not the case here.

lovinituk

trailingspouse wrote: »

And of course your insurers know that you keep stock on the premises, and they're perfectly happy with that?? And if the flat is rented, your landlord is also fully aware, and completely tickety boo with the situation??

It never ceases to amaze me how people worry about trifling amounts like mileage and don't notice that they're voiding their insurance policy and risk losing £1000's. And possibly breaking the terms of their tenancy and risking all that entails. I hope that's not the case here.

Very good point on the insurance. I was possibly looking at running my business from home temporarily and contacted the council and my insurance company. Council were fine but as soon as I mentioned stock to the insurance company they said they would no longer be able to cover me. There are companies that will cover you for having stock at home but its not cheap.