by Nick Robinson | Sep 16, 2016 | Self Employed
Working From Home? Electricity Expenses Explained.
Working from home, often as a sole trader certainly has its pros and cons, and, either love it or hate it, it is growing more and more essential to have a home office rather than commute. Claiming tax relief on certain items when working in this fashion can save a lot of money in the long run, but working out exactly what you can claim for and how to go about it when working from home can be tricky. This is why having your own accountant to help you in this regard is so important.
In essence, however, working from home needs to be looked at in two ways since it has a dual purpose as both living accommodation and a workspace. Despite this, someone who works from home will usually only receive one electricity bill, for example – and there will certainly be no breakdown of what cost relates to business and what to domestic use! It is impossible to tell from a monthly bill. Because it is so difficult to tell how much was used for what, the figures are worked out on a percentage basis.
It all depends on how many rooms within your home are allocated solely to your home business, and how long you spend in them working. Without these figures it is difficult to work out any allowable costs, even when comparing your business to another as all business and all homes are set up differently.
The area of the house (i.e. what amount of the house) is used for trading, how much electricity is consumed (assuming it is metered), and how long the room or rooms are used for trade purposes (and this will be compared to other use – if you work in a bedroom, for example, how long do you spend there sleeping as opposed to working?) are all calculated to get a final working from home expenses figure.
Yorkshire Accountancy can provide all the information that you need, contact us here