Claiming mortgage interest in self-employed expenses - how?

TehMadness

Hi folks.

I am self-employed, and work from home, using a single room as an office roughly 80-90% of the time.

Getting a head start in my self-employed taxes, but this is the first year I'll be claiming expenses on a mortgage, rather than rent. Just had a nasty shock when I've discovered I can't claim on the full amount paid for my mortgage -- only for the mortgage interest paid. However, things are a little unclear on where I should be getting my numbers from. My mortgage provider has helpfully provided a threaded view of my mortgage, including monthly interest increases. Should I be claiming expenses for a portion of that interest, per month?

For instance, I pay, say, £500 on my mortgage a month. Bank then adds £200 in interest later that month -- I would claim for a portion of the £200, instead of the £500?

Any help you folks might have will be very appreciated! As usual, tax stuff makes my head swim but I enjoy getting to grips with it all!

Jeremy535897

"If you work from home

You may be able to claim a proportion of your costs for things like:

• heating
• electricity
• Council Tax
• mortgage interest or rent
• internet and telephone use

You’ll need to find a reasonable method of dividing your costs, for example by the number of rooms you use for business or the amount of time you spend working from home.

Example

You have 4 rooms in your home, one of which you use only as an office.

Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).

If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7)."

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

[Deleted User]

I am all for the newly self-employed completing their tax returns. However, if the op has genuinely only just learnt that they are unable to claim ‘on the full amount paid for the mortgage’,I would have some concerns as to the accuracy of the final return. Can he/she be sure that it is correct in terms of income received and expenses claimed in all respects? I have come across so many instances where there is a genuine belief that, if the return progresses to actual submission, HMRC has accepted all of the declared figures. An accountant, with fees fully tax deductible, will generally save a client more money than the fee incurred while relieving the stress of the whole process. And yet, when looking to save costs, this is the expense most likely to be discarded.

TehMadness

[Deleted User] said:

I am all for the newly self-employed completing their tax returns. However, if the op has genuinely only just learnt that they are unable to claim ‘on the full amount paid for the mortgage’,I would have some concerns as to the accuracy of the final return. Can he/she be sure that it is correct in terms of income received and expenses claimed in all respects? I have come across so many instances where there is a genuine belief that, if the return progresses to actual submission, HMRC has accepted all of the declared figures. An accountant, with fees fully tax deductible, will generally save a client more money than the fee incurred while relieving the stress of the whole process. And yet, when looking to save costs, this is the expense most likely to be discarded.

As I mentioned in my original post, this is the first year I'm completing them with a mortgage. Before, I was able to claim for rent. Not FOR the full amunt of rent, but ON the full amount of rent.

But you are right, an accountant is something I have considered looking into, just to reduce the amount of stress needed. However, my figures are exceptionally simple, so it's not something I've worried too much about.

polymaff

TehMadness said:

As I mentioned in my original post, this is the first year I'm completing them with a mortgage. Before, I was able to claim for rent. Not FOR the full amunt of rent, but ON the full amount of rent.

But you are right, an accountant is something I have considered looking into, just to reduce the amount of stress needed. However, my figures are exceptionally simple, so it's not something I've worried too much about.

No. You surely don't expect the rest of us to give you a tax relief on the other N-minus-one rooms in your home?

You need to see an accountant - though that'll put him/her on the spot re: your previous returns.