Home-run businesses in Wales "could miss out" on tax breaks
HOME-RUN businesses in Wales could be missing out on valuable tax breaks, according to the Association of Chartered Certified Accountants (ACCA).
Tax relief is available on electricity, water, heating and even cleaning costs and 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 121,388 home business owners in Wales.
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 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.
“Getting it wrong could land you in hot water with HMRC, so it is worth going over what is allowed and what isn’t with an accountant.”
Ben Cottam, head of ACCA Wales, said: “Parts of Wales are becoming hot beds for home-run businesses in the UK. 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.”
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