Are you VAT-registered, and making VAT-rated sales? Then you can claim VAT back on most business-related expenses, says Tax Tips & Advice. Domestic costs which you may overlook include electricity, furniture, decorating and even pictures.
The proportion of VAT you can claim on items which serve a business and private use has to be “fair and reasonable”. So, “consider different ways you could claim a higher proportion”.
If, say, you use a room in your house solely for work and there are six rooms in your house, you could claim a sixth of the VAT on your energy bills. However, if that same room occupies 25% of the property’s floor area, you could claim 25% of the VAT.
Equally, if you have a single phone or broadband line and business calls are made at chargeable times and account for 50% of the bill, you can reclaim 50% of the VAT. Remember that “to reclaim VAT on domestic costs they must be paid for by the business”.
So any bills should be issued in the name of your company with private use reimbursed to avoid tax and NI problems.