Self-employed entrepreneurs who work at least 1,225 hours per year in their company can claim all kinds of favorable tax benefits. Those 1225 hours are called the ‘hours criterion’. For the tax authorities, a year is a calendar year from January 1 to December 31, which is why even if you start your business in August, you must work 1,225 hours to qualify for facilities such as starters’ deduction and entrepreneurs’ deduction.
For healthy entrepreneurs, 1225 hours is an achievable goal. Even if you can afford to take four weeks of vacation a year, you still only need to work 26 hours a week to exceed 1,225 hours a year.
This is different for partially disabled people, because if you are ill, you cannot work. Partially disabled people who started their business after December 31, 2006 therefore do not have to meet this excessive requirement. A. applies to these partially disabled people
reduced hour criterion of 800 hours per year
Not every reintegration agency tells this to partially disabled people and not every accounting agency tells this to partially disabled clients. That is a shame, because it concerns money that a starting entrepreneur desperately needs.
The special deduction that applies to partially incapacitated self-employed persons who have worked at least 800 hours in their own company is
- the first year 12,000
- the second year 8000
- the third year 4000
It is important that the deduction cannot be higher than the profit and it is important that this deduction item is not in addition to the normal self-employed deduction, but instead.
The proof of the number of hours you have worked in your company is your agenda.
UWV and tax authorities
The UWV annually asks partially disabled people how many hours have been worked in the company, provided that the number of hours differs from the number of hours the year before. If the number of hours is approximately the same, you don’t have to do anything. It is important that this number of hours does not deviate from the number of hours reported to the tax authorities, because the UWV and the tax authorities exchange data. If there are any deviations, the bear will be released approximately two years later. This is where a problem arises. The tax authorities take a very broad view of the concept of ‘work’ when it concerns a self-employed person. Hours that count towards the hours criterion are hours spent on: management, financial administration, business economics administration, human resources, purchasing, sales, business relations, maintenance and repairs, cleaning, washing and ironing work clothes, visiting trade fairs, reading professional literature, taking courses, standby hours, travel time. The UWV thinks very differently about ‘work’; according to the UWV, work is only work if it has been paid for. This can be solved by keeping lists in which the hours are broken down
- hours you have invoiced
- travel time
- other operating hours
You give the tax authorities the total number of hours and you give the UWV two numbers:
- the number of hours you have invoiced
- the total number of hours, which is therefore equal to the number of hours that you declare to the tax authorities
Keep those lists up to date weekly, then it is not that much work, and keep them with your agenda and the rest of your administration. You can then show something in case of difficulties. And let’s hope it goes well.