Working From Home Allowance and VAT

oompahloompah

HI everyone
Could someone please clarify something for me?
I understand that self employed folks working from home can claim income tax relief to cover increased electricity etc used while working.
Would this be minus 5% VAT (assuming the business is VAT registered), with the VAT reclaimed through the quarterly return, or does the VAT not come into it at all?
Thanks

fengirl_2

tTe £3pw alowance is for employees, not self employed people.
If you are using part of your home for business, you need to include the proportion of your household running costs in relation to the number of rooms used. Therefore, if you have 3 beds and 2 receps and use one bedroom for business, you would include one fifth of the household costs in your accounts. VAT doesnt come into it as the business is not paying the household running costs, but merely reimbursing the busness owner for the use of the home.

tyllwyd

There is more info here
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47800.htm

oompahloompah

fengirl wrote: »

VAT doesnt come into it as the business is not paying the household running costs, but merely reimbursing the busness owner for the use of the home.

Thanks, that's what I thought but a SE friend said they reclaim the VAT on the allowance they claim for working from home, so I wanted to make sure. I'll let him know!