HMRC - Terrible service. Wondering if more experienced people can help please?

Bolt1234

Hi All,

I just spoke to HMRC as I had a couple of questions in advance of filling in my tax return.  I have been using an accountant for the last few years but thought I would try and save money and do myself.  Previously I was PAYE so didnt need to fill in a self assessment form.

To say they knew less than I did was an understatement.  They kept having to look things up and were telling me things that I am sure werent correct.  In the end I asked to speak to someone else and he said that all the info was on the government website and put the phone down!

So I have a few questions and I wonder if someone can guide me please.

I am a sole trader and also have a previous company pension.  I work for a company primarily working from home with a little business mileage (its a firm of property developers).  I invoice my time every month and it equates to approx £2k per month.

I provide all kit myself i.e PC, printer, landline, broadband, car, car insurance for business miles.  I receive 0.45p per mile if I need to claim for business miles.  I provide a mobile but I am refunded the total cost of the monthly mobile charge.  

The kit is 3 years old and I didnt provide it specifically for this company use.  I already had it.

What can I claim re heating, lighting etc as I work from home 95% of the time.  HMRC told me to take all my mortgage costs, heating, lighting etc and divide by the number of rooms I have and then claim that.  Doesnt that start to affect the value of the house as its classed as business use?  

I dont have a private pension with this company (my choice btw).  I am 62 years old and anticipate working another 3-4 years.

Dazed_and_C0nfused

What can I claim re heating, lighting etc as I work from home 95% of the time. HMRC told me to take all my mortgage costs, heating, lighting etc and divide by the number of rooms I have and then claim that. Doesnt that start to affect the value of the house as its classed as business use?  

There is the simple method or the complicated one, it's not up to HMRC which you choose. Nor for them to calculate either.

As you aren't an employee why would you have a company pension 🤔

DullGreyGuy

HMRC helplines are not intended to be a substitute for an accountant

Bolt1234

So which is the simple method please?

Bolt1234

Is it £6 per week x 52 weeks?  Can I claim for using my PC even though its 3 years old now?  Or do I just claim when I buy it from new?

Jeremy535897

The company pension is presumably from a former employer? I would have a question as to whether OP really is a sole trader, given that they appear to have only one customer, and virtually no investment, but if OP is really an employee, the risk lies with the "employer".

Leaving that aside, there are two choices concerning working from home as a self employed person, which are as follows:

• the simplified expenses route, as explained here: https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
• claim actual expenses, the usual method being as described by HMRC: https://www.gov.uk/expenses-if-youre-self-employed

If OP dedicates a room in the house for business use only, that can reduce the main residence relief available on a sale of the property in the future, but even if one room is used 95% for business, that will not affect main residence relief. The house value would only be impacted if alterations were made to the property to suit the business that a prospective purchaser would not want.

Nearlyold

Do you have copies of the Accounts and Tax Returns your accountant previously submitted as they should provide a bit of a steer? (I'm not entirely clear if you used the accountant for your self-employed accounts or previously when you were PAYE)

Bolt1234

Thank you all.  Yes, I do have previous tax returns.  

I left my previous company with a large leaving payment spread over 3 years so I effectively had my old PAYE employment, my big lump sum and a new sole trader role.  That is why I used an accountant.   Its now calmed down somewhat and I just have my pension and income from being a sole trader.  The property market is very up and down so I didnt think I would be here for so long but its clear now that they probably need me as opposed to me needing them!

I havent sold any share and have no dividends

sheramber

What expenses did your accountant claim for on your previous return?

Bolt1234

Looks like £313 for home working, Telephone £312, Motor expenses £798 (where would that have come from?) and his own bill of £714.

I see the £312 is £6 per week x 52 weeks for the home working allowance but how have they worked out the Motor expenses?  I own my car and tax and insure it but do get 0.45p per mile for every business mile I do.  

Bolt1234

0.45p mileage is what I claim from my current employer btw every month via my timesheet