Claiming back on utility bills as a freelancer working from home

superfriendlyaviator

CocoM2020 said:

It’s at the bottom of the page - click the simplified expenses checker, then the start now on the page it brings you to.

Thanks, just taking a look at that now. I'd be interested to understand if my original calculation was correct either way, because that number and the flat rate are quite different.

superfriendlyaviator

Further to this post ☝
Using the flat rate gives me £26 a month as a simplified expense, which is £312 over the year.
My original calculation gives me closer to £290 a month, which is just shy of £3.5k over the year.
Obviously the difference on taxable profits is fairly substantial depending which of the two is taken into account, so I'm keen to understand this all properly.
Thanks for all the comments so far.

Brynsam

superfriendlyaviator said:

CocoM2020 said:

It’s at the bottom of the page - click the simplified expenses checker, then the start now on the page it brings you to.

Thanks, just taking a look at that now. I'd be interested to understand if my original calculation was correct either way, because that number and the flat rate are quite different.

You can't claim for rent on the property where you live if you are working from home on a self-employed basis. If you rent premises for business use (i.e. you don't live there), then that is allowable.

If you work via a limited company, you could - within reason - charge rent to the limited company even when you are working from 'home'. I think that's where the difference is arising.

Savvy_Sue

To the OP: you do realise you are not claiming back these expenses, you are only offsetting them against your profit to reduce the amount of tax you pay? 

If you go for the flat rate, HMRC will not investigate any further. If you claim more, they might, if your claims look much larger than they might expect. 

superfriendlyaviator

Savvy_Sue said:

To the OP: you do realise you are not claiming back these expenses, you are only offsetting them against your profit to reduce the amount of tax you pay? 

Yeah I get this, cheers 😄 I've been self-employed for a while and have submitted tax returns with expenses offset against my profits to reduce the amount of tax I pay. However, this is the first year I realised that some home costs are eligible.
I'm only going to claim what I'm eligible to claim, so if HMRC decide to investigate it's not an issue because I have receipts and records for everything.

superfriendlyaviator

Brynsam said:

You can't claim for rent on the property where you live if you are working from home on a self-employed basis. If you rent premises for business use (i.e. you don't live there), then that is allowable.

If you work via a limited company, you could - within reason - charge rent to the limited company even when you are working from 'home'. I think that's where the difference is arising.

Thanks Brynsam, this was where the confusion came from. 

Savvy_Sue

superfriendlyaviator said:

Savvy_Sue said:

To the OP: you do realise you are not claiming back these expenses, you are only offsetting them against your profit to reduce the amount of tax you pay? 

Yeah I get this, cheers 😄 I've been self-employed for a while and have submitted tax returns with expenses offset against my profits to reduce the amount of tax I pay. However, this is the first year I realised that some home costs are eligible.
I'm only going to claim what I'm eligible to claim, so if HMRC decide to investigate it's not an issue because I have receipts and records for everything.

You can backdate your claim for up to four years too!