Expense – Work From Home https://workfromhomepilot.com Generate Real Income Streams From Home Sat, 19 Sep 2020 22:35:39 +0000 en-US hourly 1 https://wordpress.org/?v=5.6.12 How To Get The Cost Out Of Homeworking https://workfromhomepilot.com/how-to-get-the-cost-out-of-homeworking/ Sat, 19 Sep 2020 20:42:05 +0000 http://workfromhomepilot.com/?p=37 From a textbook point of view, benefits for working from home may seem to outweigh the disadvantages of working from home. You can work from a comfortable environment; you can have a more flexible schedule and may also generally feel more relaxed and stress-free.

But, not to forget, like everything, this too comes at a price. Working from home may seem like it is worth it, but there are some costs you will have to face, no matter how much you try to minimize them.

Main Expenses:

Here are some of the expenses you will have to bear when you’re working from home, but there is some good news if you have a business account you can include part of these costs into your accounts to save yourself from tax.

Rent:

When you’re self-employed, you cannot charge your business rent because technically, you are the business. It is, however, true that if you’re renting your home from a homeowner, you can be entitled to a share of the rent for your business.

This will work if you dedicate a certain area of your house to your office from where you will exclusively be working. If you end up selling your home, if you own it, you will need to pay tax for the number of rooms you were using for business, so keeping your business to a limited number of rooms will be beneficial for you.

Council Tax:

You will need to contact your local council to get information on how to claim council tax back. Normally, if you use your house for business, you will be able to claim a part of your council tax back.

The rates of the council tax will vary according to what they are set by your local council and the value of your property. However, you may have to pay business rates rather than council tax depending on how much you use your house for business.

Utility Costs:

While you’re working in an office environment, you don’t have to worry about the costs of electricity for running the systems and lights, or the gas being used in the office kitchen. But while you work from home, you can notice the spike up on your electricity bill at the very least as you start working with more appliances and equipment than you are typically accustomed to.

These costs may increase over time, the more you establish yourself. But lucky for you, you can claim the business proportion of your electricity and gas costs that you’re using for lighting and heating your home office.

Broadband and Telephone:

Broadband and telephone expenses are also other forms of expenses that you don’t have to worry about while working from an office as your business takes care of it. But while working from home, you will notice a spike up in your telephone and broadband bills as well, and you’ll be spending more time on-line than off-line to keep up with your daily tasks.

You can also claim for your telephone and broadband by showing the actual usage of the line. If you can prove how much of it you’re using for business and how much for personal use, you can claim the full cost of all your business usage. Installing broadband solely for business use can make this more comfortable for you.

Insurance:

If you have recently started using your home for business or recently started a home-based job, it is not likely that you have insurance for it. You will probably have home insurance that does not cover the business portion of your home. For this, you will need to get working from home insurance so that your business use of the building is also being covered.

Calculating Business Use of your House:

The costs may seem like a lot while you’re working from home, but there are some ways to claim for these costs by calculating how much of your house is being used for business.

If you’re an independent worker or are in a partnership where your partners are also independent individuals, you can use the simplified accounting method that allows a flat rate calculation of how much of your house you’re using for business use.

For the flat rate method to work, you need to keep account of the average amount of hours a month you spend running your business at home and then add a fixed amount for the business use of your home in your accounts. Using this method will be easy and simple to calculate.

Though the expenses may seem like a lot at worst, there are also multiple ways to save while you’re working from home, so if you work this out well, you can balance out the costs, so working from home doesn’t seem as tedious.

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