Expenses for sole trader

I am a sole trader and VAT registered and operate my business by working at home. My questions are: 1. Am I able to claim a certain ratio (say 25%) of the home expense, such as rent , utilities , service charge as my business expense in my tax return? 2. Am I able to reclaim the VAT portion of the above expense (such as 20%VAT of the service charges) , and if so, the ratio same as that in (1)?

Hi,

If you are VAT registered and use your home for the running of the business and the making of taxable supplies then you are entitled to recover a portion of this as input tax. The apportionment you make would need to be fair and reasonable. You can see information here:

Please see the guidelines below:

Input tax effect on subsistence, staff entertainment and domestic accommodation expenses

You are able to claim a proportion of the household bill against your self employment. The costs claimed must be wholly and exclusively in the performance of your business. You can see guidance here:

Expenses if you're self-employed

Thank you.

 

Thanks

Hi, my father paid some of my expenses on my behalf as I didn't have the funds to pay them at the time. It enabled me to carry on working as a sole trader, without these funds I would have been insolvent. HMRC are saying that I cannot claim this back as expenses. Are they correct. TIA

Hi,
As you did not pay for them you cannot claim the expense.
Thank you