Expenses as a freelancer

Pinguinissima

Hi,

Sorry if this has been posted before but I work as a freelance translator and work from home (in my bedroom which is also my office). I was told at the job centre I cannot expense any bills and rent for this as I rent my flat anyway and would only be able to expense a separate office for tax purposes that I use just for my work. However, from reading online it seems that I can expense these so I am very confused! Based on the information I have found online and based on working 35 hours a week I want to expense about 23% of my rent (my flat has two rooms plus a bathroom) and then a £10 flat cost for bills and 75% of the cost of my broadband. Obviously this is per month. Would this be correct? Hope this all makes sense :-)

Blatchford

You get this kind of advice from HMRC, not the job centre! I doubt though that a desk in your bedroom will enable you to claim 23% of your rent as a business cost. And do you even have permission and insurances to operate a business from this property? Plus you will have to declare it to the Council as there are different rules for charging business rate costs to residential property.

Sharon87

Is this for your self assessment tax bill?

I work as a transcriber from home sometimes. What I do is I take my rent and bills and half it for the days I work and use that as an allowable expense. So if my rent is £750 a month (my portion of a shared house) that is around £25 a day. Half of that is for 'personal' the other half is 'business', so it's £12.50 a day. I do work around 10 hours a day sometimes. I do the same for bills.

I also put laptop expenses against my tax bill, like repairs, Microsoft Office subscription.etc If you buy a new laptop and it's solely for work, you can put that against it too, if you use it for personal and business then split it to the ratio you use it for personal/business.

The job centre staff aren't the right people to ask about expensing for self assessment tax purposes. HMRC are the people to ask if you have any questions.

Keep all receipts for anything you want to expense in case they want to audit you.

vegasvisitor

Why not look up the rates for the hours you do for simplified expenses. You'll find it's not as much as half your rent and half your bills as someone suggested. Bear in mind you only use a proportion of the space, and also a proportion of the time.

As for broadband, yes you can also claim a portion of that, but if you had broadband before the business then it could be argued that you use it significantly for personal use.

https://www.gov.uk/expenses-if-youre-self-employed

It might be worthwhile paying an accountant for some advice, as it may save you some tax (by identifying something you could claim) but also by keeping yourself right - if you are investigated and you're not doing it correctly you could get a penalty.