One of the major accountancy bodies, the Association of Certified Accountants, has reminded home based entrepreneurs that they can make a valid claim, for tax purposes. The ACCA’s head of tax, Chas Roy-Chowdhury, reflected:
“The rise in start-ups from the home is good news for the economy, but whether these home-based entrepreneurs are aware that, for example, they can deduct tax for the electricity they use in the room where they do most of their work is another matter.
Unless you are trawling through HM Revenue & Customs website, you may not know that even costs of hiring a cleaner can be deducted from your tax bill for the work they have done in the ‘business room’ of your home.”
However, business owners were advised to look before they leap into claiming.
“It is not always straightforward and it will not always be clear what can and cannot be allowed,” said Mr Roy-Chowdhury. “Getting it wrong could land you in hot water with HM Revenue & Customs, so it’s worth going over what is allowed and what isn’t”.
Home based businesses can claim reasonable costs for using a room in their house for business purposes. The costs could include: cleaning, electricity, water, heating and even decorating expenses. In some circumstances, house repairs can be tax deductable too.
If you do work from home, check out what you can validly claim.