Business rates are taxes that you have to pay on top of council tax for the premises that you work from. They are charged similarly to council tax in advance of the upcoming tax year. Some examples of non-domestic premises include:
However, some premises are exempt. These include:
Generally, you won’t have to pay business rates if you are self-employed and use a room in your home as an office and sell goods by post. If, however, you have customers visit your home, such as buyers or clients who visit your home for haircuts, you may need to pay a proportional rate. Whilst it is up to you to work out your rate, your calculations must be deemed ‘reasonable’ by HMRC.
If you are liable to pay business rates, these can be claimed back as an allowable expense of your Self Assessment tax return.
If your calculations are not deemed to be reasonable, they will be flagged and you may receive a penalty charge. To avoid this, contact our experts today for impartial advice!