Home workers in the UK encouraged to claim tax

Broadband, the internet and mobile devices such as BlackBerrys and personal digital assistants have made working from home much easier. But the Association of Chartered Certified Accountants (ACCA) is urging homeworkers to claim all the tax reliefs available to them from the taxman.
If you run a business from home, there are tax reliefs available. Chas Roy–Chowdhury, head of taxation at ACCA, says:

“If you have to work from home, HM Revenue & Customs’ has a website that
explains the benefits which are payable for home workers — tax relief is
available for the extra household expenses that have to be paid if working from
home. Typically these extra expenses include:

• the extra cost of gas and electricity to heat and light your work area




• business telephone calls




• the use of a car.

A percentage of tax relief is available based upon how much business use is
incurred. In addition a percentage of the 20% capital allowances may also
available on your vehicle based upon the percentage of business use.

You may also be entitled to a deduction for items used for your business —
either a capital allowance deduction for computer equipment or a straight
forward deduction for some items such as stationary and paper."

Also, there are other tax reliefs available for those who are an employee of a company, but have to work from home:
A flat rate deduction of £3.00 per week (from 2008–09) for each week that worked at home. This doesn't include the cost of business telephone calls. A larger amount if extra expenses are higher than £3.00 – but the taxman will have to see how these figures have been calculated. Chas Roy–Chowdhury, head of taxation at ACCA, says:

“HMRC makes it very clear that you will not be able to receive tax relief on
domestic expenses that are being paid, such as mortgage payments. And no reliefs
are available when it comes to using services such as phones and internet which
are also used for personal usage. There has to be a clear demarcation.

It is important to claim all tax reliefs if you are running a business from
your home, or if you are working as an employee at home; however small the
relief payments may be, it is still important to claim them. That old adage of
looking after the pennies and the pounds will look after themselves is certainly
relevant in this case.”