What are ‘Simplified Expenses’?

6 years, 1 month ago by Oliver Atkinson

If you’re self-employed or a business partnership you may be able to use ‘Simplified Expenses’.

What are ‘Simplified Expenses’?

If you’re self-employed or a business partnership you may be able to use ‘Simplified Expenses’. Simplified Expenses are a way of calculating some of your business expenses using flat rates instead of working out your actual business costs. You don’t have to use simplified expenses; you are able to decide if it suits your business.

What type of expenses come under the Simplified Scheme?

Vehicles

Simplified Expenses can be used to calculate car, van or motorcycle expenses using a flat rate for mileage. Under the Simplified Expenses flat rate, cars and goods vehicles can claim a flat rate of 45p per mile for the first 10,000 miles. They can claim a further 25p per mile after 10,000 miles. Motorcycles can claim 24p per mile under the scheme. By using the flat rate on a vehicle, one must continue to use it for that vehicle for the remainder of the time it is used for business purposes.

Working from Home

You can calculate your allowable expenses using a flat rate based on the hours you work from home each month. The scheme can only be used if one works from home more than 25 hours per month. In a month, if one works from home 25 to 50 hours, £10 per month can be claimed. If one works from home 51 to 100 hours per month, £18 per month can be claimed. Working from home for more than 101 hours per month entitles a claim of the flat rate of £26 per month. The flat rate for working from home does not include telephone and internet costs. The business proportion of these bills can be claimed
separately.

Living in Business Premises

If you use your business premises as your home, you can use simplified expenses instead of working out the split between private and business costs. This is mostly applicable to businesses such as guesthouses and B&B’s.

With Simplified Expenses you calculate the total expenses for the premises. Then use the flat rates to subtract an amount for your personal use of the premises, based on the number of people living on the premises and claim the rest as your business expenses.