Accounting for contractor expenses8/7/2023 ![]() Software should be expensed in the year it’s bought. As they’re likely to be utilised over several tax years, you can expect them to be capitalised in your company accounts and depreciated over time. Computer equipment and softwareĬomputers for work that will not be used for any significant personal tasks can be purchased directly via your business bank account and taxed accordingly. Install a second internet connection in your company’s name and pay for it with your business bank account to show it’s for work use and you’ll be able to make a claim. Similarly, it’s unlikely HMRC will offer tax relief on your internet bills if you only have one connection at home. Installing a new line and paying for it from a business bank account makes claiming contractor expenses on it much more straightforward. That’s because any business calls you make from your personal phone would have to be itemised to be claimed back, which is a time-consuming process. If you make a lot of business calls it’s worth installing a second line or taking out a business mobile phone contract. In order to claim tax relief on them you must be able to demonstrate they have a business function and aren’t for personal use. Viable business expensesīe prepared to be questioned by HMRC about whether purchases are viable business expenses or items that represent significant personal usage. These include everything from office furniture and computer software to internet access and rent. If you would usually be working on a client site, but have been conducting your business from your own house as a result of COVID-19 restrictions, you are likely to be able to claim tax relief on a number of things. With Intouch voted the best contractor accountants UK, you can access online accounting advice anytime and additional contractor accountancy services by phone to ensure you’re not missing out on any of this tax relief. Business expenses you can claim when working from homeĪs a contractor, you can claim tax deductible expenses on a range of purchases and services that facilitate you working from home. With this in mind, it’s important to know what contractor expenses you can claim and how to go about it. While the service we deliver may be very similar, the taxable business expenses are likely to have changed. External forces have impacted many contractors’ ways of operating recently and for lots of us, that means working from home.
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