Claiming electricity business expenses in parents home

para01

Hi all,

I hope someone can help point me in the right direction.

I work a few hours from home doing web development, and as such make use of my bedroom for, say, 8 - 16 hours per week. Obviously, i would like to include some of the electricity cost and broadband as expenses when filling out self assessment tax return.
I have used a calculation which i can only assume is reasonable, based on usage of the room and the fact that it is one room in 12, and have come to a figure i think acceptable.

However, this is my parent's house. I do pay rent to them on a monthly basis and this goes in part towards electricity bills etc.

My question is whether it is acceptable for me to put electricity down as an expense if I am only indirectly paying towards it.
If HMRC were to question, I could only point to the cheques I write to my parents as proof of playing towards these bills, they would not see bills coming out of my account labeled 'electricity' and 'broadband'.

What do you think?

typistretired

When you can get tax relief for household expenses

If you have to work at or from home you can get tax relief for the extra household expenses that you have to pay. Typically these extra expenses include:

• the extra cost of gas and electricity to heat and light your work area
• business telephone calls

You won't be able to get relief on domestic expenses that you're paying anyway - like your mortgage or council tax. You also won't be able to get relief for expenses that relate to both business and private use - such as your telephone line rental, or Internet access.


How much relief you can get

From 2012-13 onwards, for payments of up to £4.00 per week, or £18 per month for monthly paid employees, you don’t need to provide any records of the household expenses you’re claiming relief for. For amounts above £4.00 you will need supporting evidence to show that the amount you are claiming is no more than the additional household expenses you have actually incurred.
The guideline rate for 2008-09 to 2011-12 was £3.00 per week and for 2007-08 it was £2.00 per week.

John_Pierpoint

Presumably you are doing this "homework" as a self employed sole trader?
[There are several badges of self employment versus being in a master and servant relationship - but basically you get the job done and then if it is OK you send the client an invoice and get paid for it].
http://www.hmrc.gov.uk/incometax/relief-self-emp.htm#1

If you are new to self employment, you do have some obligations to tell the tax man promptly, though will will still enjoy a "honeymoon" period before the first tax is collected.
http://www.hmrc.gov.uk/incometax/starting-work.htm#6

There has been a move starting this year, to simplify expenses for small sole traders, you will find a link to a .pdf document explaining the standard amounts that can now be claimed, without keeping records of daily expenses (like charging £0.45 per mile for 4 wheel motorised visits to clients, suppliers etc. rather than fiddling about trying to demonstrate the cost of running 33% of a sport car, that you absolutely must have in order to do your work.;)).

However I do notice there seems to be a lower claim limit creeping in - this just might be the start of an attempt to clamp down on subsidising hobby businesses via the tax system, now that some benefit claims are linked to and paid via the tax system.