Working from home. What can I claim?

If you are self-employed and working from home you are entitled to claim the expenses that you incur during the course of your business.

There are two ways to do this:

1. There is a monthly fixed rate allowance that you can claim depending upon the average monthly hours you work from home
   • Work 25-50 hours per month, you can claim £10
   • Work 51-100 hours per month you can claim £18
   • Work 101+ hours per month you can claim £26
   • This method has the advantage of being easy to calculate and minimises book-keeping records
   • You will need to keep some sort of log of hours worked
2. The actual expenses method
   • claim a proportion of costs of running the home eg. light and heat, insurance, council tax, repairs, cleaning, mortgage interest
   • there is no set method of apportionment so a reasonable method of apportioning each expense must be decided upon
   • document your claim
   • review it annually

Beware in claiming that any part of your house is used exclusively for business use as this would compromise any future claim for Private Residence Relief if you were ever to make a gain on the sale of your home.  There is also a risk that the authorities would seek to charge business rates if they could argue that use of part of the building was not residential.  You may also find planning rules become an issue.  For these reasons, I would advise against making any claims from the business for altering the fabric of your home for business use eg converting an attic into an office.  If you have to put in special electrics for business use eg telecoms, computers and internet, this type of expense is 100% business related and acceptable to claim.

If you would like to discuss this further, please contact me lford@jonathanford.co.uk

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