Tax Relief

What tax breaks are there for house staff? –

Sole proprietorships / partners / members of LLP Employees or directors So you claim Record the expenses in the accounts you created.
Make adjustments to the private consumption tax using the tax calculation using the self-assessment tax return. For partners and members of LLPs, such claims should be made in the partnership tax return / calculation against their share of the profits. Such claims should not be made on your own self-assessment tax return. HMRC would normally expect the company to confirm that these expenses are entirely and solely in the nature of the trade. The company may reimburse the employee / directors’ expenses through its own expense procedures. There is no obligation to do so. If the latter is the case, the person would have to register for self-assessment in order to claim these expenses with their earned income in a self-assessment tax return.

Any claims must be substantiated and records / receipts retained in the event of HMRC inquiries. The difference for directors is that the effort must be complete, exclusive and necessary (WEN test) as part of their duties as employees.

Telephone, cellular and broadband costs If you have a phone for business and personal use, you can claim the business element through the accounts. Part of the operating costs can also be claimed for the use of a landline connection. If you include the full costs in your accounts, a personal use adjustment should be made when creating the tax calculation.

If you have a separate work phone, you can claim 100% of these costs. This also applies to broadband costs.

You can only claim phone costs that can be directly quantified as business costs (individual phone bills) – online rental costs cannot be claimed as they do not meet the WEN criteria and are considered a dual purpose cost (you had to have the cost because it is a private phone).

Company cell phones are a tax-free service. If these are not made available to you, you can only claim 100% of your own office at your home.

Working from Home (Simplified Editions) The amount of the entitlement depends on the number of hours worked per month.
– 25-50 hours = £ 10
– 51-100 hours = £ 18
– 101+ hours = £ 26 Workers are currently entitled to a deduction of £ 6 per week or £ 26 per month (excluding phone / broadband) for every week they have to work from home. This covers the additional lighting, heating and energy costs.

UK workers can claim tax relief directly from HMRC.

Working from home – (actual costs) 1) Calculate your total annual costs. As a self-employed, this can include mortgage interest (or rent), council taxes, water fees, insurance, electricity, mainly gas. Occasionally, repairs to the business and cleaning rooms (A) can also be considered.

2) Calculate the percentage of time the space is used for business purposes. Example: 8 hours of business use, but a total of 12 hours of use per day = 66%. It should encompass all uses, not just for one person. It should never be 100% for capital gains tax purposes.

3) How many rooms do you use for business multiplied by the number of rooms in the whole house (without bathroom) (C&D). Last weekly entitlement = (A / 52) x% x (C / D)

All employees wishing to deduct more than £ 6 per week / £ 26 per month are expected to keep records and confirm how their numbers have only been calculated for additional lighting, heating and energy costs.

Other costs such as rent, mortgage payments, unmetered water and insurance do not fully, exclusively and necessarily meet the criteria for compliance with the mandatory rules and cannot be invoked. Because these amounts would have to be paid anyway.

In certain circumstances, directors may be able to claim rental charges. However, this is rare and often difficult to prove.

office equipment You can deduct the full cost of essential equipment such as computers or workstations for tax purposes.

The relief is usually taken through capital allowances as they would be considered fixed assets.

Most of the time, the company would provide whatever equipment was needed for the person to do their jobs. As long as there is no significant private use of the company’s assets, there are no tax effects. If the person left the company, the company would request the return of the assets.

Direct reimbursements to employees are rare. If the person has to pay for office equipment and the company reimburses it, unless that is part of contractual obligations, the asset is purchased by the person in person. The company does not have access to the asset after the person leaves.

If you don’t get a refund, you’ll need to provide evidence of the WEN test before submitting an application to HMRC. For example, if a person had a computer desk before they were hired and has just replaced it, they will not be able to make such a claim.)

Use of private vehicles – mileage claims People who use their private vehicle for business trips can claim the following tariffs as expenses:
– up to 45p per mile for the first 10,000 miles
– 25p per mile after that. It is important to keep a record of business mileage. These must contain travel data in the event of HMRC inquiries. The mileage tariff applies only to trips or a recognizable part or part of a trip that are used exclusively for business purposes. It is not available for private journeys, such as B. trips from home to work or for trips that serve both a business and a private purpose. The mileage rate covers the costs of buying, operating and maintaining the vehicle, such as fuel, oil, maintenance, repairs, insurance, vehicle excise duty and MOT. The rate also includes the depreciation of the vehicle. Use of Private Vehicle – Actual Cost A self-employed person can calculate the total expenses for the vehicle during the accounting period for the operation and maintenance of the vehicle. This contains:

  • fuel
  • oil
  • maintenance
  • Repair
  • insurance
  • Road tax

The individual can claim the business percentage of these costs, normally calculated as business miles, based on the total number of miles traveled during the year.

N / A For individuals, mileage billing cost information should be used. Other travel expenses Individuals can claim parking fees, tolls and meals, including overnight stays, for other trips (taxis, trains, etc.). These must remain at an appropriate level. No different from sole proprietorships, but companies in most cases have expense procedures in place for such expenses.

Related Articles