| BHBPA is preparing to lobby government to update the simplified expenses flat rate – we believe this review is long overdue We’ve heard from one of our members, Amanda Anstee of Amanda Anstee Editing and Proofreading, who represents small businesses on BHBPA’s Steering Committee. Amanda has written to our MP Alison Bennett pressing for an update to simplified expenses rates. What are simplified expenses? These are flat rates that can be used in tax returns by self-employed people who use their home for business to reduce taxable income by an amount that reflects a proportion of household running costs, based on the amount of time spent working. It is designed to save the time-consuming and complicated process of making the calculation of how much of a household bill for electricity and heating usage, for example, is due to business use: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim75010 Long overdue for review These rates have not been reviewed for over a decade. While £26 a month seemed a reasonable deduction ten years ago, it is now far less reflective of the much-increased cost of energy and other bills that self-employed work-at-home individuals pay, and essentially results in paying more tax than they should. Of course these individuals are not obliged to use simplified expenses and they could calculate the actual proportion of these costs. However, the point of the simplified expenses scheme was to help self-employed people for whom this is not cost-effective. Government response The response from HMRC when Alison Bennett raised the issue said ‘As with all taxes and allowances, the government keeps the rate of simplified expenses under review and any changes are considered by the Chancellor’ but gave no indication of how or when they have reviewed this and why they determine this to still be a suitable rate. Let us know your opinions Amanda has already written to our MP Alison Bennett but we’d like to hear from all our members who face a similar issue. We are also bringing our poll to the attention of other local business groups in Mid Sussex and hope that Alison can lobby further on this issue. |
 In the first instance send your comments to: richard.cox@bhbpa.co.uk 07393 728688 |