Can I Claim?
Yes and No.
Any business related expenditure can be eligible for tax relief. As a freelancer who regularly works from home, you might decide to use your home as your office. This has implications for your tax returns and eligible deductions for tax, when submitting your accounts to H.M.R.C.
For instance, should you choose to purchase some equipment and/or fixtures and fittings, these expenditures may be permissible purchases. However, you must ensure that the reason for any such furnishing expenditure is mainly for a business investment. For instance, if you invest in a gym for your own use you will not be allowed to claim any relief. But if you are a trainer and receive your clients in your home gym you can prove the business expenditure.
You will need to differentiate between business use and private use and so if there is mixed use, for the purposes of your tax return, you will need to exclude any private usage from the total value of any purchases.
This can be claimed as under ‘expenses’ in your Self-Employed page: "Computer and Office Equipment - Other Equipment".
If the adaptations require some investment in fixtures, you can itemise this under Self-Employed Expenses: "Home as Office - Fixtures and Fittings".
The point as far as H.M.R.C. is concerned is legitimate purposes of ‘chattels’.
H.M.R.C. may possibly undertake enquiries into cases where a deduction has been made for ‘chattels’ i.e. equipment to confirm that those items of expenditure fall within their definition.
Whilst they do not provide a comprehensive list of items that are accepted for tax return purposes as ‘chattels’ or ‘moveables’ on their website, they do recognise that each case has to be considered on its own merits. This is an area of the law that continues to evolve.
On H.M.R.C.’s website, they list the following items that are generally regarded as reasonable purchases:
- carpets (fitted or otherwise)
- curtains and blinds
- free standing furniture
- kitchen white goods
- electric and gas fires (so long as they can be disconnected from the power supply without causing damage to the property)
- light shades and fittings (unless recessed).
If you are at all unsure as to ‘free standing furniture’ items in your gym fall under the definition of ‘chattels’ for U.K. tax purposes, you don’t have to become a tax expert, or hire expensive accountants. Some of our clients have spent hours, or even days, wrestling with painful and confusing HMRC forms, which is hardly surprising given the extensive ‘tomes’ H.M.R.C. staff work with and the fact that the rules are constantly being updated to keep up with the changing face of British businesses.
If you haven’t done so already, sign up for free with SimpleTax, or simply log in to get help answering your dilemmas with some straightforward questions about your income and expenses. We do the hard work in the back-ground, so you don’t have to sweat the small stuff, but sweat it out in your kitted home-based gym that helps you stay fit for business!
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