Housing Benefits, Self Employed Working From Home

spacemonkey95

Hello all,

I have been having some trouble with my local authority recently (long LONG story), and I am just trying to find out what is and isn't an allowable business expense.

The local authority claims they do not allow a portion of my home rent which is used to run my office as a business expense. However, I have looked at the relevant part of the Shelter Guide to Housing Benefit which states the following:

"An appropriate proportion of the rent paid by someone working from home should also be deducted as a business expense. Relevant factors in arriving at a figure to use would include the size of the working area in relation to the rest of the home and the proportion of time that the area is utilised for business... Where part of someone's rent is identified as a deductible business expense it should also be deducted from the claimant's eligible rent."

I have also checked the Housing Benefits Regulations 2006 which states the same rule.

So my question is, does anyone here have experience of this? And if so, what would be the procedure in forcing the local authority to re-assess the last financial year (2009-10) on this basis?

Thanks

spacemonkey95

Does anyone have any thoughts on this?

missmontana

I think Fluffymovie works in Housing, maybe PM her (I think its a her) and ask.

terryw

You would need to make an appeal against the level of housing benefit paid.

However, from the HB information that you quote
"Where part of someone's rent is identified as a deductible business expense it should also be deducted from the claimant's eligible rent." might you not be worse off as your eligible rent would be reduced by this amount? Or if I am missing something, please let us know the figures involved.

fluffymovie

I do indeed work in HB and I am a she!

Self employed claims are complex and I don't have my notes at home (shock horror!) but I have googled and found this information which may be of use.

Basically, if you are claiming it as a business expense, you can't claim it in HB as well. So the maximum rent that they would use to calculate your award would be the cost of the accomodation for the business, taken from your overall eligible rent so you may well be losing out that way.

Part of rent and water rates for room in the home set aside as an office
Maybe. It depends whether the claimant has obtained larger accommodation than s/he needs for normal domestic use in order to accommodate business activity. A computer in the corner of the living room might not count.

Note that HB is not allowed for any part of the rent wholly and exclusively paid as a business expense.

HB Reg 10(4)

NB As long as the claimant is not over-accommodated or subject to rent restriction, a quick calculation will tell you that it is better for him/her to have the income taken into account and keep the eligible rent: reduced income leads to extra benefit at the rate of 65p in the £, but extra eligible rent counts in full. This effect is magnified if the self-employed earnings are high enough to attract a tax or Class 4 NI deduction: the 65% income taper only applies to net income.


Part of domestic heating and lighting bills
Yes. Because the heating and lighting would be switched off at home if the claimant were an employed earner working in an employer’s premises

spacemonkey95

Thanks for your replies.

I share my house with my business partner, so my portion of the rent is £410.

The LHA is £75 a week or roughly £300 a month.

Therefore, even if the eligible rent was reduced by £100 this shouldn't make a difference, unless I am misunderstanding the way it is calculated.

spacemonkey95

Aha, thanks fluffymovie (I only refreshed the page after my previous reply).

That's very interesting - that suggests that it is worth my while to ensure the costs are included, even though it reduces the eligible rent.

Please can you point me in the direction of the page you took that information from?

Also, do you know if the local authority are allowed to refuse to consider those as business costs, or must they do what the regulations state?

Macro_3

spacemonkey95 wrote: »

Thanks for your replies.

I share my house with my business partner, so my portion of the rent is £410.

The LHA is £75 a week or roughly £300 a month.

Therefore, even if the eligible rent was reduced by £100 this shouldn't make a difference, unless I am misunderstanding the way it is calculated.

I would suggest that you would actually be worse off. Say the business proportion of your rent was £20 per week. Your income for HB purposes would be £20 less as it would be taken as an expense, which would increase your potential entitlement by up to £13 (but only up to the maximum LHA). Your LHA, though, would reduce by £20 per week down to £55 per week.

spacemonkey95

Why would the LHA be reduced? My rent is already over £25 higher per week than the LHA.

spacemonkey95

Does anyone know the answer to my last question?