Tag: #workfromhome

How To Reduce The Running Costs Of Your Business

Making savings to reduce the running costs of your business could be ‘make or break’. Figures suggest that the number of companies going bust this year could be the highest since the financial crisis of 2009. Statistics also show that insolvencies rose 10% from a year ago in the three months to the end of September and there has also been a sharp increase in the number of firms at risk of going bust. Before your company falls into this category, it’s worth considering how you can save monies. In this latest article from team4 bookkeepers, based in Sussex with worldwide clients, we look at eight things you can do that could dramatically reduce your overheads.

 

  1. Explore alternative business premises

 

Could there be an alternative to the long-term commitment of renting office space? If you are not fully utilising all the space you have at your disposal, you might consider downsizing. You may not need that large office anymore as you are now outsourcing your marketing and bookkeeping, so maybe a space half that size would suffice. Perhaps a co-working arrangement might work for you or could employees work from home? In the latter scenario, you could save rental fees and the associated costs of a physical building, saving you a packet.

 

  1. Check regular outgoing payments

 

Do you know what you are paying for every month? And if so, do you need everything that is going out of your business? To reduce the running costs of your business, it’s time to pull the plug on unused services. These could include subscriptions or networking fees or software apps that are never used. You can check with your team to see if services are still necessary. With software, consider downgrading to a free version. It really is easy to lose track of payments particularly if made by recurring payments such as on your credit card or direct debits. Here at team4, we think you will be surprised about what you are paying for that you don’t need.

 

  1. Are you getting the best energy tariff?

 

If you are not tied into a contract, find out if you can get a better deal. It’s worth checking a few companies to see the best contract terms available. On top of this, you may be able to make savings on the energy you use to reduce the running costs of your business. Turning the thermostat down by a degree or two can save a lot and your office does not need to be heated when you are not using it.

 

  1. Could you get a better deal on your mobile telephone and Internet?

 

When your mobile and Internet services are due for renewal, check out other deals, as there are some really good ones out there. Some suppliers have deals on the number of phones that you use. We recommend that you don’t automatically renew services including mobile phones, business insurance and broadband contracts. Renegotiate every year to make sure you are getting the best price.

 

  1. Shop around for the best price on supplies

 

You could be making savings on software and general office stationery. Buying in bulk can be a good option if you know you will use/sell the stock. You may find that there are some good deals around traditional sale times including Black Friday later this month (24 November) and Cyber Monday (27 November). Also be on the look out after Boxing Day and New Year.

 

  1. Go paperless to save oodles on printing costs

 

To reduce the running costs of your business, consider moving completely away from any paper documentation and go completely digital. Going paperless can really save you money and so encourage your team to only print out documents only when essential.

  1. Draw up a budget and stick with it

 

This will help to identify areas where you can make savings. Your budget can be based on your average income per month and our tip is underestimate income and overestimate spending. This is applicable irrespective of the size of your business, from start-ups to growing businesses.

 

  1. Get the best professional advice

 

Make sure you are getting the best advice from your bookkeeper and/or accountant. Tax relief is available for small to medium sized businesses. And don’t miss out on tax-deductible expenses across a wide range of categories including office supplies, uniforms and vehicle fuel.

How can team4 help you to reduce the running costs of your business?

 

In these tough times, we hope you have found our latest article about how to reduce the running costs of your business helpful so that you can lower some of the expenses and overheads associated with running your business. Here at team4 our aim is to support you by optimising your expenses, keeping close tabs on your spending and helping you set budgets. If you are looking to work with a bookkeeping team with a proactive approach and your interests at heart, please get in touch. We can help you with ways to improve your cash flow and ways to get your clients to pay on time. Call us on +44 1825 763378 or +44 1903 442511 or email info@team4bookkeeping.co.uk

How Much Does It Cost To Work From Home?

So, how much does it cost to work from home? The pandemic gave us a once-in-a-generation opportunity to change and reimagine the ways we work. Improved technology meant that working remotely had never been easier. And recent figures from the Office for National Statistics report that between 25 January to 5 February, around 40% of working adults had worked from home at some point in the past seven days. Throughout 2022, the percentage of working adults reporting having worked from home has varied between 25% and 40%. These figures clearly indicate that homeworking has been resilient to the pressures such as the end of the restrictions and the increases in the cost of living. So with no clear upward or downward trend in the figures, team4 looks at how much it does cost to work from home? We explore the tax relief for the self-employed as well as those who are employed.

It’s too easy to just think about the savings you are making

When working from home, it is easy to forget about how much it is actually costing you. It’s all too simple just to think about the savings you are making on travelling to and from work and not eating lunch out at restaurants or paying out for takeaways or drinks from coffee shops. Home working incurs electricity, Wi-Fi and other utility costs as well as broadband and telephone expenses.

What extras do you have to pay for?

  • Electricity to power computers (laptop and desktop)
  • Additional heating
  • Broadband
  • Telephone
  • Office furniture – chair, desk and stationery
  • Insurance
  • Rent and mortgage interest

Energy costs have been rising sharply

When considering the cost to work from home, you will need electricity to run your desktop computer and to charge a laptop. Your home will also need extra heating throughout the day, so it’s important to take into consideration that heating in the UK is extremely high at the moment. The Office for National Statistics reports that although electricity prices fell by 1% between March and April 2023, this has to be compared to a rise of 40.5% between the same two months a year ago. And although gas prices fell by 1% between March and April 2023, this was the first time gas prices had fallen since October 2020. Again, this can be compared with a 66.8% rise between the same two months a year ago.

Broadband, mobiles, office furniture and insurance

Other expenses you will need to consider are the cost of broadband and telephone charges. It’s a good idea to shop around for the best broadband package that will suit your requirements. It is estimated that in the UK, more than a third of broadband usage is used for working purposes. Well made office furniture and an ergonomically made office chair are essential expenses and don’t forget about insurance.

Claim tax relief for your job expenses

HMRC reports that you may be able to claim tax relief for the additional household costs you incur if you work at home for all or part of the week. It clearly states who and who cannot claim tax relief.

You can claim tax relief if you have to work from home, for example because:

 

  • Your job requires you to live far away from your office
  • Your employer does not have an office

 

You cannot claim tax relief if you choose to work from home. This includes if:

 

  • Your employment contract lets you work from home some or all of the time
  • Your work from home because of coronavirus (COVID-19)
  • Your employer has an office, but you cannot go there sometimes because it’s full

 

Tax relief may be claimed on business phone calls and gas and electricity for your work area.

How much can you claim?

HMRC states that you can either claim tax relief on:

  • £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) – you will not need to keep evidence of your extra costs
  • The exact amount of extra costs you’ve incurred above the weekly amount – you’ll need evidence such as receipts, bills or contracts

You will get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

What expenses can you claim when working from home as self employed?

  • Gas, electricity and water bills
  • Internet and telephone bills
  • Rent and mortgage interest costs
  • Council tax

Some of these running costs can be deducted as allowable business expenses when working out your taxable profit. You can claim for a percentage of your utility bills and you can also claim a proportion of your costs for rent and mortgage interest. You cannot claim for things you use privately. For more detailed information, refer to an earlier blog from team4, which is a guide to self-employed expenses.

How can team4 help you claim tax relief if you are working from home?

It was over three years ago that the pandemic transformed the way we work. Working from home certainly comes with its own financial burden, and we hope this article has explained the cost to work from home. If you are unsure what you can claim for, or you are looking to outsource your accounting operations, don’t hesitate to get in touch with team4. Call us on +44(0)1825 763378 or email info@team4bookkeeping.co.uk