Work from home tax expenses

One thing I heard is that you must ensure you don't devote any room purely to your business - i.e., make sure every room remains a functioning part of your "home", rather than only ever being used for "work" stuff. Otherwise you have to pay the council business rates!

susan_ward wrote:

I read somewhere a few years ago that you can claim tax relief if you use your home for working in , if there are any tax gurus here i would appreciate confirmation as i complete my own tax returns .

I think it was you can claim 25% of heating and electricity bills - is this the case - any help will be most apreciated.

When I was self employed I claimed for advertising, postage costs, costs of stationary/printing relating to use of p.c. travelling costs, maintenance of car for transport, telephone calls made. I received tax relief on all these. An accountant would advise you if you don't get all the answers on MSE.
Hope this helps.

If you are an employee who works from home they have cut the amount you can claim right back to £2 per week. Not sure about the limits if you are self employed.

Robboseven wrote:

Try this calculator, it's the advice I followed. Self employed.


http://www.taxbuddies.com/calchom.php

Hope it helps

But that calculator seems to be for those who are employed, not self employed - I quote from the page - "You must go further and prove that the nature of your employment impelled you to do so".

It doesn't actually give you a breakdown of their calculation, so you'd have a job trying to explain to HMRC why you've used that figure as they want calculations! From the questions they ask, I'd say it was far too simplistic and looking at some results from random inputs, I don't think it actually complies with the published HMRC guidance. I'd be very wary of using it to be honest as HMRC published guidance gives a figure of £2 per week for employees who have to work at home as it only covers the "additional" costs of home working, which is basically only the extra power you use, and certainly not a proportion of rates as indicated by that calculator.

As for self employed (sole traders and partners), you CAN take the total costs of the home (exc mortgage) and apportion that according to the area used and the time used, so you will almost always get a much higher claim if you are self employed than if you are an employee.

If you trade through your own limited company, you can claim even more by "renting" part of your home to your company, in which case you can go further and claim a proportion of your rent or mortgage interest that relates to the business occupancy, but then you also have to declare rents received and make a claim for expenses on your personal tax return.

In both of these latter cases, you could well be stung for business rates and could well lose some of your principal private residence relief for CGT when you sell you home, but usually your use of home would be so immaterial for these not to matter.

That website refers to employees who work at home as well, not to someone who works from home as a self-employed person. I disagree with Pennywise - the calculator on that page appears to be correct, as it gives £400 as the claim for a person working 40 hours a week from home, which is what my accountant says I am able to claim.