If you are using your home for work, HMRC accepts that your company can compensate you tax and national insurance free.
Chartered Accountants in Stockport, IN Accountancy, say that the allowance of £208 to cover additional home costs, is probably not enough to cover your extra energy bills or to reimburse you for the loss of a room at home, let alone covering any fixed costs like your council tax!
No sum on which to pay tax
Another approach could be to rent your home workspace to your business and charge a rent that reflects your energy bills, mortgage interest and standing charges. This way if you match the rent and the expenses incurred, there will be no sum on which to pay tax and you can make sure you have covered your costs.
Charge a fixed rent
Alternatively if you use your home for work, instead of balancing the expenses and the rent, you could charge a fixed rent, similar to the commercial rent for a similar space and this approach could produce tax and national insurance savings.
For in-depth advice on creating a tax-efficient home office, contact [email protected] or ring 0161 456 9666.
