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Simplified expenses not simple

25/11/2017 15:23:09
I'm attempting online self assment for the first time this year and can't work out how to calculate what we could claim for council tax, mortgage interest, heating, electricity and Property insurance (assume that building).

Called HMRC who said they could just refer me to the Simplified Expenses Helpnote which I read and did the reckoner and am still unsure as to what to do!

Can anyone offer any advice please? My husband is a sole trader, we live in a 3 bedroom semi with 8 rooms, 2 of which are sometimes used for work (we think 6hours each week).

Also is it worth adding any donations to charity, not that it's much but say £200 per annum?

Thanks in advance for any advice.
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Re:Simplified expenses not simple

27/11/2017 10:54:28
Hi
The customer has the option to claim for business use of home by either using the simplified method of calculating expenses
https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
or
using the actual method of proportioning the costs
If you work from home
You may be able to claim a proportion of your costs for things like:
• heating
• electricity
• Council Tax
• mortgage interest or rent
• internet and telephone use
You’ll need to find a reasonable method of dividing your costs, eg by the number of rooms you use for business or the amount of time you spend working from home.
Example You have 4 rooms in your home, one of which you use only as an office.
Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).
If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7).
In relation to donations to charity, only charitable donations made by using the gift aid scheme should be entered on the tax return. These are entered on the main return, not the self-employment section.
Kind regards
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Simplified expenses not simple

01/12/2017 16:25:16
Hi, I do appreciate your response but as the two rooms are only sometimes used for business, at a guess 6 hours a week in total. So how do I decide what is reasonable to claim?
Many Thanks

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Simplified expenses not simple

01/12/2017 17:09:42
If you run a limited company you are only allowed to claim £208 ie £4 per week. That is a good yardstick for a safe claim.
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Simplified expenses not simple

04/12/2017 07:09:04
Thank you. Should I use the same yardstick as a self employed sole trader without employees?
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Re:Simplified expenses not simple

04/12/2017 09:41:03
Hi Gill
I have sent you a private message offering a webchat. Please check your messages and come back to me accordingly.
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  • Catherine Newman
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Simplified expenses not simple

05/12/2017 16:15:33
As I posted as anonymous, I would be interested in the response to my response as I have taken the time to provide an answer. My answer to Gill's query would be go for £208, if happy to do so or go for £250 (a safe notional figure).
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Re:Simplified expenses not simple

06/12/2017 11:27:32
Hi

Based on the simplified expenses method as per the link https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
The original post calculation of 6 hrs a week, this would take you into the 25 – 50 hrs per month bracket which is £10 a month working out at £120 a year.
The £208 mentioned in the comments is the £4 a week calculation which is for Employees. It is not used for a self-employed sole trader as referred to in the original post therefore is not correct in these circumstances.
More complex calculations can be found on www.gov.uk and the Business income manual. You may wish to us via telephony or webchat to discuss the exact calculation with the totals of the utility bills to hand as these can be complicated.
Guidance is here https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim47800

Kind regards
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Simplified expenses not simple

06/12/2017 11:42:10
Dear HMRC ADmin 18

I will not answer any more queries if you would like to tell people my answers are incorrect. I have been in the big 6 or on my own in 1985.
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Simplified expenses not simple

06/12/2017 18:43:03
shouldn't I receive an email when a post is left? I did tick that option.

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