Quick self-assessment Q

[WilsonFrickett]

Work from home as a freelancer. Last year I was able to claim on 25% of my heat and light costs, is that a standard %? Only ask because I've now moved to a bigger house with an additional bedroom (still have a designated office) - does that make a difference to the %?

I have always done it based on the number of rooms I have. So in my, now, 4 bedroom, 2 reception room house, I count my office as 1/6th and take that much of heat/light/broadband/insurance/etc.

You also need to apportion by time. So Tee2072 if you use your office 27 hours a week when not out at clients. and 3 hours a week for doing your domestic paperwork (the use as a dwelling must be material, so you can't just say you store papers or use it once a month for an hour) you can claim 90% of 1/6 of the costs that you apportion in this way. Don't forget to include council tax and mortgage interest, providing you used the mortgage to purchase your home, or extend it to provide the space you work in. (If you borrowed money for your business you can of course claim all of that separately). If you do not apportion by time i.e. you declare that you are not using part of your home as a dwelling, you may need to declare (or be assessed for) a capital gains tax liability when you sell it as that part will not be eligible for Private Residence Relief.

I don't believe you only use 1/6 of your broadband bandwifth for your business: is there not a more appropriate apportionment for this?

@WilsonFrickett - there is no standard percentage. You need to come up with a sustainable argument for whatever percentages you use, noting my previous comment.

I would never recommend anyone does this themselves - get an accountant:

(i) it is a lot easier for you to argue that you have taken reasonable care if the calculation has been done in conjunction with a professional (check they are a professional of course - anyone can call themselves an accountant);

(ii) any accountant that values her PII cover (check she does have PII cover of course) will not let you submit something that is patently incorrect, protecting you from a big potential liability on investigation.

Sorry, MrA, I did forget to say I did that. I have time tracking software and I use that to determine how much I actually work.

As for broadband, I'm not sure how I would figure the apportionment any other way. I guess I could use my time tracking again and do it based on actual hours, since I track time specifically as to what I am doing for a client, i.e. designing a logo (no broadband use) versus designing a website (which can be gobs).

I make so little money it's not all that important anyway. I never owe taxes or am owed money back, although that may change this year, YAYAYA!

Yep Mr A I thought I could be super smart and just do it myself this year but I've so many questions I'll have to do the accountancy call of shame 'Can you fit me in this week please because apparently there's a deadline for this shizz?' . Next year I'll do it in the summer!

I do have an accountant I consult with, but I do the actual work myself. He just checks my numbers and confirms I haven't missed anything, sort of a simple audit.

He's also a friend and I do his website for him in return. Barter; the work of champions.

Can I bump this up and query? I'm confused.

the HMRC website says that you can only claim £3 a week for heating and lighting etc if you work from home, or more if you submit evidence- but it also says you cannot claim for mortgages or council tax etc that you have to pay anyway for living in your home.

That is the rules that apply to employees. HMRC's internal guidance relating to self employment is here, but don't expect to be able to read that and come up with an optimal claim because (a) there are dozens of pages there, and loads more background case law that is relevant; accountants have years of training and experience and generally pay for resources that are created and updated by specialists that cut through the crap and distil the information needed; and (b) information in HMRC's manual is geared towards HMRC staff ensuring that taxpayers do not claim allowances to which they are not entitled and does not give you the knowledge you need to prepare a claim that is the maximum amount of expenses that is available.

Thank you. I have clicked on the link- it's not that hard to understand TBH once you know where to look.