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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15713
Experience:  International tax
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I run a photography studio and currently write off all of the

Resolved Question:

I run a photography studio and currently write off all of the rent I pay on the photography studio property as a taxable expense, because the entire property is used for business purposes. My landlord is changing our lease from a commercial to a residential agreement. I would like to know if a residential lease makes a difference regarding how much I can write off as an expense, ie the entire monthly rent. Similarly, I currently pay residential council tax, not business council tax, I also would like to know if I can write this off as a business expense. Finally am I able to pay casual staff cash in hand and then write this off as a business expense-do I have to register them as employees with the inland revenue-if so what are the steps for this?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
You can claim expenses for:
rent for business premises
business and water rates
utility bills
property insurance
security
The lease change to residential would not change the use of the property by you.
If these casual staff persons are contractors then yes you can claim that expense. You would need to make certain they are not employees.
Whether an individual is employed or self-employed will depend upon the nature of the relationship with the person for whom the services are provided. Usually it will be easy to decide whether someone is an employee or self-employed.
Customer: replied 2 years ago.

Thank you for your response. Can you please clarify for me: the residential council tax I pay is for the building which I rent out as a business (photography studio), can I write off this council tax as an expense.

Also, if I live in the building, but I rent out the entire space (100% of the property) as a business, can I still write all off the rent off as a business expense

The employees I hire are freelance, self employed contractors, not regular employees. What steps, if any, do I need to go through to claim the money I pay them as an expense-do I need them to sign anything, do I need to give them a payslip or keep some kind of a record of paying them? Many thanks

Expert:  TaxRobin replied 2 years ago.
If you live in the building then no you cannot claim all as business. You have to prorate the business use.
The same with council tax. An appropriate proportion of your council tax bill is allowable, if part of your home is used exclusively for business some or all of the time.
You should keep a record of the amounts you pay for casual staff or contractors. A receipt or signing for the payment is good.
Customer: replied 2 years ago.

Ok, so if I lived in the building but I rented the space out from 0900-1700 everyday as a business, then I could claim roughly 50% of the rent, is that correct?

Expert:  TaxRobin replied 2 years ago.

It goes by the space used not the time used. Part of the rent you pay to a landlord is an allowable expense if part of your house/flat is used solely for business purposes

Customer: replied 2 years ago.

Ok, if I lived in the space and the people use 100% of the space 365 days of the year, can I then claim the entire rent as an expense or still only a percentage?

Expert:  TaxRobin replied 2 years ago.
If truly the entire place is used for business during certain hours then you can use the time method.
50% as you suggested.
Customer: replied 2 years ago.

Thanks, ***** ***** If I am self employed and I travel from my residence to work via the tube, can I claim that journey as a travel expense. I would use a pay as you go oyster card.

Expert:  TaxRobin replied 2 years ago.
As long as the expense was just for business. You would need to keep a log of your travel costs.
Customer: replied 2 years ago.

do you mean some kind of diary? I travel to the same work everyday.

Thanks

Expert:  TaxRobin replied 2 years ago.
If you travel to the same place every day then that is not allowed. It would need to be a temporary location away from your normal workplace location.
Customer: replied 2 years ago.

so i cannot claim any allowance for travelling to and from work, unless it is a non-frequent place of work?

even if i am freelance, and self employed?

Expert:  TaxRobin replied 2 years ago.
That is correct. Even if self employed.
Customer: replied 2 years ago.

ok thank you very much for your advice

Expert:  TaxRobin replied 2 years ago.
You are most welcome.
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