Expenses for the Home based business

This subject seems to be one that many clients ask. Self employed people mainly base their work place at home, although work takes place at customer locations. This applies to many trades & professions from plumbers, accountants, chiropractors, computer technicians etc.

As you visit customer sites, it would be reasonable to be able to charge to your business the cost of getting to the customer locations. But, there is a little bit of an issue if when you walk in after being at customer locations and your trading activity stops as you get home.  If no work was done at home, it implies that home is not the true base of your business. You need to make sure that business happens in the home.

In order to claim costs to travel from home to a customer location, you need to keep records of what you do at home in relation to the business. The type of records would be:

  • A diary of time spent working on your business administration such as raising invoices, dealing with your bookkeeping, writing proposals and quotes, white papers, report and on-line educations, plus social media & marketing tasks;
  • The proposals & invoices that you do all have your home address as the business base;
  • Complete and accurate records of all the travel you do to the customer locations – be it mileage, public transport even air & boat fares;
  • If you have any insurance policies to cover your business, they would normally be addressed and registered to where the business is based, so this should be the home if that is where the business is based.

It is the same if you are a company, so in the ideal world, the registered office should be at the business base. However, this address is a matter of public record and once set up, will remain so.

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You probably all do this type of work at home but not think about it or record it.   Don’t be a monkey, keep records as you go along, as it is so much easier to justify the travel expenses from home.

 

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