Does your business require specific software investments? If so, then you will be able to claim expenditure for software programs used in your business against your income.
Can I claim?
If you use computer software strictly for business, you can claim back the total purchase value when submitting your tax return. However, if you use this for both work and personal matters, you must then define a private usage percentage i.e. work out what proportion of time you use the software for personal, or recreational use and how much it is used for the purposes of carrying out business.
On our SimpleTax platform, you just enter the amount and private use and that’s it! Game over, you might say! Simply go to the section: Self-Employed Expenses - "Computer and Office Equipment" – "Software".
For the purposes of H.M.R.C. self-assessment, you are obliged to only transfer a portion of the purchase value of your computer software to your business accounts, where there is likely to be mixed use. Only the business portion of your usage will be allowed for tax purposes.
It is in many cases highly unlikely that you will keep track of every time you use computer software on your devices, let alone your family’s use if you work from home, as a freelancer, for instance. Trying to work this out can be a headache, especially when you have a teen who understands how to ‘play’ with your “new toy”, better than you!
A common example is image manipulation or video processing software. Because these are often fun tools to use for personal purposes, like sending personalised virtual birthday cards, it is inevitable there will be mixed use of your software if you have a home-based business.
The questions we ask don’t require you to stare at your computer screen until your eyes run; we take the pain out of software expenditure processing for you.
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