Claiming Expenses - Sole Trader w/ employee

[lizzy chaplin]

Hi All,

I'm a sole trader with one employee ( who I pay approx £7,000 a year ). My employee works from home and has asked if she would be able to claim back any electricity or internet bills? (She is a sewist)

I understand she doesn't earn enough to pay tax but would she be able to claim back any expenses for her bills? Or is this something I could do for the business as a sole trader?

Thanks in advance!

 

[STDFR33]

You need to pay tax to take advantage of the relief.

 

[MyAccountantOnline]

Hi All,

I'm a sole trader with one employee ( who I pay approx £7,000 a year ). My employee works from home and has asked if she would be able to claim back any electricity or internet bills? (She is a sewist)

I understand she doesn't earn enough to pay tax but would she be able to claim back any expenses for her bills? Or is this something I could do for the business as a sole trader?

Thanks in advance!

If she doesn't pay any tax she cant actually claim anything back.

I would think the best way to deal with this would be for you to pay an additional amount to cover the costs she's incurring working at home.

 

[lizzy chaplin]

If she doesn't pay any tax she cant actually claim anything back.

I would think the best way to deal with this would be for you to pay an additional amount to cover the costs she's incurring working at home.

Thanks for your quick reply, where do I stand if I pay tax as a business? Can I claim back this way for bills?

 

[MyAccountantOnline]

This link explains the tax relief which she may be abcould claim if she paid tax

Thanks for your quick reply, where do I stand if I pay tax as a business? Can I claim back this way for bills?

You can claim expenses to reduce your tax if expenses are wholly and exclusively for the purposes of your trade. I see no issue with you increasing your employees salary to cover her costs whilst working at home.

 

[Deleted member 335660]

Firstly I would check with your accountant but in my experience she could end up paying more tax if she tries to claim this as she is an employee and they may see it as a benefit. I was a salesman with company car and mobile phone built in (1980’s) and had to pay for the privilege.

As others have suggested an allowance that you could add to her salary might be better.

 

[WaveJumper]

All of the above but also raises the question of is she actually employed by you officially, are you paying minimum wage and from her prospective is she charging you enough for the work to cover the extra expense she is incurring working at home

 

[Paul Norman]

There is a specific tax allowance for anyone who works from home. It is not very much! And, of course, if someone doesn't pay any tax, it doesn't help them at all.

One might argue that an allowance from yourself, in the form of a small wage increase, might be a better way of addressing the fact that asking our teams to work from home does cost them money.

Of course, it also saves them travel costs. There is a conversation to be had here between your team member and yourselves.

 

[Newchodge]

A sewist?

You can give her a weekly tax free allowance to cover the costs of working from home. Currently £6 per weeek

https://www.gov.uk/expenses-and-benefits-homeworking/whats-exempt

 

[ecommerce84]

If she’s any good, I’d give her a rise to cover it.

If she’s only sew-sew I wouldn’t.

Either way, don’t allow yourself to get stitched up.