Being among the fresh business owners who had to hit restart on their careers, the sometimes forced upon nature of having to set up and run a business from home creates pandemonium on the work life balance.
Some people love the prospect of working from home whilst others have found it an extra level of stress, and this trickles down to both sole traders and limited companies alike. There are differences though that can have an important effect, such as business expenses for this new normal.
Let’s take a dive into the benefits of remote working and how they have a saving not previously available to your business.
Firstly there are the greater benefits of working from the homestead.
No matter what there are extra levels of flexibility when working from home and having a sense of control over your environment. This is also very desirable to your employees to cut out travel time and expenses. This is another area where savings are good for all involved.
In having your staff not commuting or spending money on petrol every week for work travel, they are saving money as well as time. Not getting stuck in inner city traffic or late running trains creates a happier mindset and can even provide more quality of life with being able to work around school runs and other important events.
Also, you are saving on office expenses such as electricity and heating requirements. You will also save on those lunchtime costs by eating more healthily at home. Above all else the productivity chart increases with comfort and being able to schedule your own time of working, which is an improvement on morale.
Where Do Expenses Occur?
This area can tend to be a little complex because if you have a home office then you may be able to claim home office expenses.
That may be good news but be aware that there are rules in place to govern this, which essentially state that any purchases which are classed as essential and/or necessary to your work are the most basic. Now, you could also make reasonable claims for furnishing your office with such items as a desk and chair etc which is agreeable as a necessity.
The rules on business expenses do tend to differ between those classed as a sole trader and those that are classed as a limited company.
If you are a sole trader, you can claim expenses in one of two ways.
The first would be to claim simplified expenses for self-employed. The second would be to work out all costs via the calculation of the proportion of business and personal use within your home. This ranges from electric bill costs to smaller uses.
If you are a limited company working from home then the simplest form of calculating home office expense is to use HMRC’s published allowance to cover additional costs for running a business from home. The flat rate that is claimable is around £6 per week totalling £312 per year. The good thing is you won’t need receipts to prove those expenses.
You could also rent your home office to your own business which is a claimable expense more than the flat rate on offer. This runs a risk of resulting in additional taxes if you do not generate a rental agreement between you as a homeowner and the limited company, so be sure to handle that area up front.
For additional help with your business expenses you can outsource your company books to professionals in bookkeeping services. They not only are able to best guide you on the best course of action in balancing your books but also in helping your company grow financially and physically.
No matter how the future of your business looks, home working has great benefits for business owners from smaller expenses to better organization through hiring a bookkeeper Manchester.