Home offices could be costing independent professionals
For many people, having a home office is one of the easiest ways to work for themselves, and HM Revenue and Customs recognise the fact that many people dedicate some of their homes to administering their business by offering tax relief on the associated running costs. However, the allowance provided for those self employed individuals who are giving up some of their living space has been shown to be inadequate in terms of the real costs of working in such a set-up.
According to Regus, a company which specialises in providing serviced offices and office space to individuals and companies, the actual cost of having an office in your home could be as much as £45 a week, totalling £2,000 per year. This means that the current allowance of £4 a week falls some way short of the real costs that independent professionals are incurring by working from a home office. Many believe that an alternative model whereby self employed individual can claim a proportion of expenses for the use of their home office.
The Chief Executive of Regus, Richard Morris, believes that the costs of furnishing a home office represent a significant outlay for home workers who have to create a space in which to work. The figure of £2,000 was reached after the business conducted a poll amongst 4000 home workers in order to assess the outgoings they incurred by working from home. Of those, the respondents who ended up most out-of-pocket were those who are employed and work from home either full or part-time. Only 35 per cent of respondents in that position had had their costs covered or contributed to by their employers. This has led to a degree of cynicism amongst those with permanent roles who believe that employers only offer the opportunity to work from home as a way to reduce their own costs by passing them on to their employees.
If you work from home and want to know more about how to claim expenses, then our contractor’s guide to expenses can help you to understand what you can and cannot claim. We can also help you with contractor tax and the Flat Rate VAT Scheme so that you can understand all the various ways you could be saving money.
For more information about how our low-cost packages and take advantage of the expertise of our specialist accountants, call us today on 01442 275789 or email firstname.lastname@example.org for details.