The high number of home-run businesses in Wandsworth could be missing out on valuable tax breaks, such is the intricate nature of the UK tax system, says ACCA (the Association of chartered Certified Accountants).
Tax relief is available on electricity, water, heating and even cleaning costs. House repairs are subject to tax deductions in certain cases, but ACCA says many businesses are not taking advantage of the tax relief.
Recent figures estimate that there are 356,823 home business owners in London, with Wandsworth having among the highest percentage in the country. 32,840 workers are home business owners, accounting for 19% of the total workforce in the borough.
Damian Connolly, ACCA Central London members’ network said: 'London and in particular Wandsworth has among the higher proportion of home businesses. The worst thing that could happen now in this atmosphere of innovation is for some of those new, emerging businesses to struggle due to unwarranted tax bills. With so much to think about when running a business, tax deductions can get overlooked. It’s worth doing your homework and getting sound advice to ensure you aren’t paying more than you need to.'
Chas Roy-Chowdhury, ACCA head of taxation, said: 'The rise in start-ups from the home is good news for the economy, but whether these home-based entrepreneurs are aware that, for example, they can deduct tax for the electricity they use in the room where they do most of their work is another matter. Unless you are trawling through HM Revenue & Customs website, you may not know that even costs of hiring a cleaner can be deducted from your tax bill for the work they have done in the ‘business room’ of your home.
'It might not seem like much, but over the space of a year, all these costs for heat, light, even decorating expenses add up and could help a new, home run business at a time when available cash is at a premium.
'Of course, it is not always straightforward and it will not always be clear what can and cannot be allowed. Getting it wrong could land you in hot water with HMRC, so it’s worth going over what is allowed and what isn’t with an accountant. They will also be able to assist home business owners in other parts of running a business, such as cashflow and other tax and business affairs.
- Ends -
For more information, please contact:
Ray Allger, ACCA UK Newsroom
+ 44 (0)20 7059 5788
+44 (0) 7540 919 819
Notes to Editors
- ACCA provides free guidance to small businesses - link to the website via the 'Related Links' section, left of this article.
- ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
- We support our 162,000 members and 428,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 89 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
- Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.