TAX RETURN - ADVICE NEEDED

[willow2]

Hello peeps - just filling in my first self-employed tax return for ages. Work from home, so am trying to work out what proportion of my landline/internet bill and mobile phone bill is acceptable as an expense. 70% too high? Anyone out there know? TIA

Personally I'd think 70% was high but then I don't know what yoour self-employed business involves. It is best to be able to prove it with detailed analysis of your 'phone bills. The Inland Revenue do not just accept that the split is the same for mobiles and landlines.

Have you any mobile bills you can go through and mark the business calls for a couple of months and then use this to estimate. Keep these bills for proof of the basis of your estimate if you ever have an enquiry and repeat the exercise once a year to review your business/private split estimate percentages. Do the same with landline bills too. Do you use the internet for business purposes too ? If you have separate bills for broadband you need to apportion this too.

The Inland Revenue can challenge estimates so keep any workings out that you do to arrive at the estimates.

If you don't already get analysed bills, it would be advisable to ask for them in future if telephone is a large part of your expenses.

I'm a journo - use internet for most of the day and do all interviews and lot of research by phone. Does that help? Had an inland revenue bloke tell me to work out an acceptable percentage and stick to it, but didn't actually tell me what would be considered acceptable percentage.

Also, telephone/internet package is a set fee and not usage based.

The Inland Revenue bloke was right, "work out" a percentage by reviewing a couple of your bills, landline and mobile, tedious I know but if you keep the workings out as evidence you are on a good sound basis and may not need to review the percentage that often.

The I/R will ask you to justify your business percentage if you have an enquiry. They don't like "guesstimates".

So long as you have applied some sort of methodology such as say, computer is switched on 10 hours a day and I am "at work" for 7 of those, so 70 % of internet/telephone line use is business could be argued.