If I work from home regularly as part of my full time employment, can I claim back part of the cost of my broadband connection as a necessary expense...I'm an IT Manager so it IS necessary. If so, how would I work it out? What about costs of computer magazine subscriptions? :)
It would be better to install a new line that the company could pay for and get broadband on that new line, keep paying for your domestic connection (but look for the cheapest possible deal) and have the company pay for the new line and its Broadband.
Not exactly, for self-employment such costs can be claimed if an acceptable proportion allowed for private use - ie for a telephone one would deduct 25%. Same goes for internet connection, although I claim all mine as it is in use 24/7 as a webserver - and I do very little ordinary surfing.
As for an employee of a company, I would guess that a similar scheme would be acceptable to the tax office.
But for an employee the expenses also have to be 'necessary'. IR will ask "why can you not use the facilities that your employer provides at his office?" An employee will find this next to impossible to provide a satisfactory answer.
I know plenty of friends and contact that are employees and do not have an office to work out of, or if they do it is impractical to visit more than a day at a time. Example, a service engineering manager covering the North West with the only company office in Surrey. Whilst most days are involved in visiting customers on his patch, mornings and sometimes entire days are spent at home dealing with customers by phone.
I KNOW that he can claim back a proportion of his telephone, lighting , heating etc from his employer for running this office from home, I wasn't sure how the employer could treat this as an expense, but here you go I win your bet:
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(Employer can pay genuine business calls, amounts greating than this taxable)
Hardly. Consider the situation I found myself in, up to a month or two ago. My employer (actually, the client I was assigned) had closed their Cambridge office. The nearest office was in Saltaire, near Bradford. Not fancying the commute, I telecommuted instead. Without the broadband connection, I would have been rather jobless. In this kind of situation, I find it hard to believe that the IR would refuse the broadband expense.
(What I was doing required broadband speeds; dial-up would never have worked.)
Surely the usual thing here is that the IR will accept as business expenses anything your employer reimburses you for. they don't usually accept expenses that you claim are for the business but which your employer does not reimburse. But then you won't need to claim them against tax in that case sinmce they won't have been taxed in the first place.
but was there not a case of a man who needed a suit for work and angued that he never needed a suit for ordinary life and that he managed to claim it against tax?
I don't quite follow. Not all expenses which the employer re-imburses need be allowable for tax - casino losses, parking fines, etc. Likewise, some expenses are allowable, even though not re-imbursed - e.g. mileage allowances *below* the IR approved rates.
Are you thinking of the Barrister's dark clothes? If so, that was a self-employed (Schedule D) case, and the IR won.
As others have said, it is the "necessarily" component which dooms most claims to failure - in theory. It is an objective rather than a subjective test. However, the IR usually adopt a more relaxed approach and allow at least a proportion of such expenditure.
Business calls You can ask for a dispensation to the extent that your payments meet the cost of business calls. If you have a dispensation for such payments, that amount can be excluded from the calculation of Class 1 NICs. If you do not have a dispensation you should subject the payments to PAYE or return them on form P11D as above. The employee may set the cost of business calls against his or her income but this does not alter your obligation. If you can show that all or part of what you pay is for business calls then even without a dispensation you can exclude that amount from the calculation of NICs.
This seems to say that an employee can claim tax relief on costs of business calls from home if they are not refunded by expenses, or they can be paid by the employer and tax excluded if procedures followerd.
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