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Hints & Tips

Lymm Village

Tax Hints and Tips

Lymm Village

Free hints and tips about tax and accountancy from Lymm Tax

Broadband and working from home

Having broadband is an essential business requirement but is your home broadband in your own name or in the name of your company?

If your broadband is in your own name then you can claim a deduction against your business profits for that part of the cost which relates to your business use. So if you estimate that you and your family use the internet half of the time for gaming, watching TV or shopping then you can offset 50% of the cost against your business. If you are a sole trader you can also claim the appropriate percentage of the VAT back, if you are VAT registered.

However if you are operating as a company you should arrange your broadband so that the contract is in the company name, not you own name.

Because broadband is a necessary business expense you will be able to deduct 100% of the cost from your business profits and claim back 100% of the VAT. Any private use will be merely incidental to the company’s use and won’t increase the cost of the broadband to the company. So there will be no tax charge on you for private use and no restriction on how much of the total cost you can claim.