complete financial know how

“My Mate Says…

…I can claim for my new flat screen TV, my TV licence and fridge to store my lunch in as I work from home…” my mate says

The Fridge:

Keeping your lunch in the fridge at home won’t fall under the wholly and exclusively for business purposes guidelines, as there is a strong likelihood that the rest of your weekly shopping will also be in there. HMRC will argue that your business doesn’t require a fridge when you are working from home.

As you are working from home you can’t claim the cost of your lunches either. HMRC defines subsistence as meals and any other necessary costs of travelling.

TV & TV Licence:

When a TV is in an office building and is used to show company results or presentations, it is easy to claim for business use.

In most cases, you won’t be able to claim a TV or TV licence relating to your own home as it is difficult to prove use is wholly and exclusively for business purposes. It is likely that HMRC will argue that the TV is in your living room being used to watch your favourite TV shows. Yes, unfortunately Downton Abbey isn’t business related.

Before claiming this as an expense you need to have a conversation with your accountant to discuss any reasons why you think you will win the argument with HMRC.

The Rules:

HMRC defines an allowable expense as wholly and exclusively for business purposes.

• This means the expense needs be entirely for your business.

• If an expense benefits you and your business, HMRC may either disallow the expense or allow a proportion of it to be claimed.

• There needs to be a way of identifying the allowable proportion.

• An allowable expense (also known as a tax-deductible expense) will give you tax relief, so you will pay less tax.

• Whether an expense can be claimed as tax-deductible can depend on the nature of the business, therefore it’s important to have an accountant who understands your business to ensure you’re paying the right amount of tax.

If you need some clarification on the advice you’ve received from your mate, please feel free to get in touch by phone or email.

01908 219100

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