As latest figures show that home business owners account for more than half the total number of UK small businesses, with more than 120,000 in Wales alone, Roger is urging Llanelli home workers to ensure they play by the rules to make the most of tax benefits and avoid hefty penalties.
The figures, according to new Office of National Statistics analysis from Direct Line for Business, said that the current 2.5 million home business owners now account for 52% of the total number of UK small businesses and covered a wide variety of business sectors, from e-commerce, travel, marketing and recruitment to catering, photography, hairdressing and arts and crafts.
Roger who runs TaxAssist Accountants in Llanelli said:
“Working from home can be very effective for many small owner-managed businesses, saving on premises and transport costs. With better wireless internet connections and the use of smartphones and tablets, it is becoming an increasingly attractive option for entrepreneurs.
“But there, are of course, tax implications and Llanelli home business owners need to ensure they’re claiming what they’re entitled to whilst playing by HMRC’s rules.”
Roger said that home business owners should consider:
- Business use of your gas and electricity should be allowable- and you may even be able to make a claim if your use is only minor (for say, writing up your books)
- Although clothing is classed as part of your everyday wardrobe and is not tax deductible, if the clothing is necessary protective clothing or a uniform bearing clearly identifiable logos, it could be tax deductible
- You can claim the cost of business calls on your home telephone and a reasonable proportion of line rental, in addition to expenditure on internet connections
- Don’t allocate an area of your house solely for business use. Doing this could jeopardise your valuable Private Residence Relief (PRR) for Capital Gains Purposes. It can also make your home vulnerable to paying business rates rather than just domestic rates
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