Could someone please advise me what allowances a Sole Trader can reclaim.
I have had an enquiry from a prospective client about what percentage of telephone, heating and mileage he may reclaim as a self employed Instructor. He has told me that his accountant negotiates a discount with the Tax office for these as he works from home. Also, he was told that he must not disclose that he uses a spare bedroom as his office, instead he uses the dining room ??
In my experience the majority of sole traders running their business from home will opt to claim a use of home as office allowance at a rate of around £8 per week. This amount will cover the business use of services such as light and heat, telephone, internet, rent.
I'm no tax expert but I believe if you use a room in your house soley for business purposes then it is possible that when you come to sell the property, a proportion of the sale may be subject to capital gains tax. I guess by using the dining room there is a dual purpose and therefore the tax man would find it hard to claim it is used only for business.
Depends what kind of Instructor ... if your Client is a driving instructor, the private proportion of Motor Expenses to disallow may only be 5 % ... if he is any other kind of instructor, the Motor Expenses disallowance may be as much as 50 %, if not more ...
