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March 14. 2016

Your Home is no Tax Haven!

We recently wrote about ‘employing’ someone to take care of your paperwork, answering your calls and basically all things office related. A common question relates to utility bills and what can and cannot be claimed as business expenses.  Your driving school business is predominantly run from your tuition vehicle but it still may be possible to gain tax relief against certain utility bills.               

Some of your business, such as preparing lesson plans and bookkeeping is carried out at home but this would probably account for less than 10% of your time. So what expenses are allowable for tax relief?  In most cases, it will be small proportion of your heating and lighting bills.  Unfortunately, rent, rates, council tax and water rates are not allowed for tax purposes. It may be possible to gain relief by making a claim for ‘home use as office’ but whether this is beneficial is heavily dependent upon your personal circumstances and you should certainly seek expert advice before proceeding down this route!

If you decide to ‘build’ an office in your home or add an extension in which to house an office you should ask yourself if it is justifiable and necessary for the running of your business.  However, it is possible to gain tax relief on items that you purchase to ‘kit out’ your ‘office’ such as filing cabinets and the like, but not the cost of construction or converting a room into an office.

Generally, for a small business, a table in the kitchen will suffice for your paperwork! 

What would your dream office look like???

If you’d like further advice on this or any accountancy matter please contact FBTC on 0344 984 2515.


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